Five9 greenshoe increases 0.125% convertibles to $258.75 million

By Sarah Lizee

Olympia, Wash., May 8 – Initial purchasers for Five9 Inc.’s 0.125% convertible notes due 2023 fully exercised their option to purchase an additional $33.75 million of the notes on Monday, bringing the total deal size to $258.75 million, according to an 8-K filing with the Securities and Exchange Commission.

As previously reported, the company priced $225 million of the convertible notes on May 3 with an initial conversion premium of 30%.

Price talk had been for a coupon of 0% to 0.125% and an initial conversion premium of 30% to 35%.

J.P. Morgan Securities LLC and Goldman Sachs & Co. are joint bookrunners for the Rule 144A deal.

The initial size of the deal had been $200 million with a greenshoe of $30 million.

The notes are non-callable until May 5, 2021 and then may be redeemed subject to a 130% hurdle with a make-whole. There is takeover and dividend protection.

Holders may require the company to repurchase the notes upon a fundamental change.

The notes are convertible into cash, shares or a combination of both at the company’s option.

In connection with the pricing of the notes, Five9 will enter into capped call transactions with the initial purchasers and their affiliates.

The cap price on the capped call transactions will initially be $62.80, which represents a premium of 100% over the last reported sales price of stock from the company’s perspective.

Net proceeds from the offering were roughly $250.9 million. Five9 used about $31.4 million to cover the cost of the call spread. The remaining amount will be used to repay borrowings under its senior secured credit facility and for general corporate purposes.

The company’s senior secured credit facility currently has an outstanding balance of $32.6 million.

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

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