By Abigail W. Adams
Portland, Me., May 22 – Five9 Inc. priced $650 million of five-year convertible notes after the market close on Thursday at par with a coupon of 0.5% and an initial conversion premium of 30%, according to a company news release.
Pricing came towards the cheap end of talk for a coupon of 0.125% to 0.625% and at the cheap end of talk for an initial conversion premium of 30% to 35%, according to a market source.
J.P. Morgan Securities LLC, Goldman Sachs & Co. LLC and Morgan Stanley & Co. LLC were bookrunners for the Rule 144A offering, which carries a greenshoe of $97.5 million.
The notes are non-callable until June 6, 2023 and then subject to a 130% hurdle with a make-whole.
They are putable upon a fundamental change.
In connection with the offering, the company plans to use $181 million of the proceeds and issue 2,723,582 shares to repurchase or exchange $181 million principal amount of its outstanding 0.125% convertible notes due 2023.
The company also entered into capped call transactions with a cap price of $206.68 per share, which represents 100% over the last reported sale price of stock.
Net proceeds are expected to be $633.8 million, assuming no exercise of the greenshoe. Approximately $78.7 million of net proceeds will be used to cover the cost of the call spread, $181 million will be used for the repurchase or exchange of the 0.125% notes due 2023, and the remaining amount will be used for working capital and general corporate purposes.
Five9 is a San Ramon, Calif.-based provider of cloud contact center software.
| Issuer: | Five9 Inc.
|
| Securities: | Convertible senior notes
|
| Amount: | $650 million
|
| Greenshoe: | $97.5 million
|
| Maturity: | June 1, 2025
|
| Bookrunners: | J.P. Morgan Securities LLC, Goldman Sachs & Co. LLC and Morgan Stanley & Co. LLC
|
| Coupon: | 0.5%
|
| Price: | Par
|
| Yield: | 0.5%
|
| Conversion premium: | 30%
|
| Conversion price: | $134.34
|
| Conversion rate: | 7.4437
|
| Call options: | Non-callable until June 6, 2023 and then subject to a 130% hurdle with a make-whole
|
| Put options: | Upon a fundamental change
|
| Pricing date: | May 21
|
| Settlement date: | May 27
|
| Distribution: | Rule 144A
|
| Talk: | Coupon of 0.125% to 0.625% and an initial conversion premium of 30% to 35%
|
| Stock symbol: | Nasdaq: FIVN
|
| Stock price: | $103.34 at market close May 21
|
| Market capitalization: | $6.41 billion
|
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