8x8 greenshoe exercise increases 0.5% convertibles to $287.5 million

By Angela McDaniels

Tacoma, Wash., Feb. 19 – 8x8 Inc. said the $37.5 million over-allotment option for its 0.5% convertible notes due 2024 was exercised in full, increasing the size of the issue to $287.5 million from $250 million.

As previously reported, the company priced an upsized $250 million of convertibles after the market close on Feb. 13 at par with an initial conversion premium of 30%.

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 was the bookrunner for the Rule 144A deal.

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. 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.

Proceeds will be used to cover the cost of capped call transactions and for general corporate purposes, which may include potential acquisitions.

8x8 is a San Jose, Calif.-based cloud-communications company.

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