Five9 talks $600 million five-year convertible notes to yield 1%-1.5%, up 27.5%-32.5%

By Abigail W. Adams

Portland, Me., Feb. 26 – Five9 Inc. plans to price $600 million of five-year convertible notes after the market close on Tuesday with price talk for a coupon of 1% to 1.5% and an initial conversion premium of 27.5% to 32.5%, according to a market source.

Morgan Stanley & Co. LLC (lead left), Goldman Sachs & Co. LLC and J.P. Morgan Securities LLC are bookrunners for the Rule 144A offering, which carries a greenshoe of $90 million.

The notes are non-callable for three years and then subject to a 130% hurdle.

They are putable upon a fundamental change.

The notes will be settled in cash, shares or a combination of both at the company’s option.

In connection with the offering, the company will enter into capped call transactions.

Proceeds will be used to cover the cost of the call spread and to fund the repurchase of a portion of the company’s 0.5% convertible notes due 2025 with any remaining amounts to be used for general corporate purposes.

Five9 is a San Ramon, Calif.-based provider of cloud contact center software.

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