By Abigail W. Adams
Portland, Me., Feb. 14 – 8x8 Inc. priced an upsized $250 million of five-year convertible notes after the market close on Wednesday at par with a coupon of 0.5% and an initial conversion premium of 30%, according to a company news release.
Pricing came at the rich end of talk for a coupon of 0.5% to 1% and at the midpoint of talk for an initial conversion premium of 27.5% to 32.5%, according to a market source.
Morgan Stanley & Co. LLC is the bookrunner for the Rule 144A deal, which carries an upsized greenshoe of $37.5 million.
The initial size of the deal was $200 million with a greenshoe of $30 million.
The notes are non-callable until Feb. 4, 2022 and then may be redeemed subject to a 130% hurdle with a make-whole. There are no puts.
The notes are contingently convertible until Oct. 1, 2023. They will be settled in cash, shares or a combination of both at the company’s option.
In connection with the pricing of the notes, 8x8 entered into capped call transactions with a cap price of $39.50, which represents a premium of 100% over the last reported sales price of stock.
Net proceeds are expected to be $242.2 million assuming the greenshoe is not exercised.
Proceeds will be used to cover the cost of the call spread and for general corporate purposes, which may include potential acquisitions.
8x8 is a San Jose, Calif.-based cloud-communications company.
| Issuer: | 8x8 Inc.
|
| Securities: | Convertible senior notes
|
| Amount: | $250 million
|
| Greenshoe: | $37.5 million
|
| Maturity: | Feb. 1, 2024
|
| Bookrunner: | Morgan Stanley & Co. LLC
|
| Coupon: | 0.5%
|
| Price: | Par
|
| Yield: | 0.5%
|
| Conversion premium: | 30%
|
| Conversion price: | $25.68
|
| Conversion rate: | 38.9484
|
| Call options: | Non-callable until Feb. 4, 2022 then subject to a 130% hurdle
|
| Put options: | None
|
| Pricing date: | Feb. 13
|
| Settlement date: | Feb. 19
|
| Distribution: | Rule 144A
|
| Talk: | Coupon of 0.5% to 1% and initial conversion premium of 27.5% to 32.5%
|
| Stock symbol: | NYSE: EGHT
|
| Stock price: | $19.75 at market close Feb. 13
|
| Market capitalization: | $1.86 billion
|
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