Five9 greenshoe ups five-year convertible notes to $747.5 million

By Sarah Lizee

Olympia, Wash., June 3 – Initial purchasers for Five9 Inc.’s five-year convertible notes exercised their $97.5 million greenshoe in full, lifting the total deal size to $747.5 million, according to a press release.

As previously reported, the company priced $650 million of the convertible notes after the market close on May 21 at par with a coupon of 0.5% and an initial conversion premium of 30%, according to a company news release.

Pricing came toward 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.

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 were about $95.1 million with the full greenshoe exercise.

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.

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