HomeAway to sell $350 million five-year convertible senior notes

By Cristal Cody

Tupelo, Miss., March 24 - HomeAway, Inc. announced on Monday that it intends to offer $350 million of five-year convertible senior notes.

The notes due 2019 will price in a Rule 144A-eligible private placement deal, which includes a $52.5 million over-allotment option.

The notes will be convertible prior to the close of business on the business day preceding Oct. 1, 2018 at the option of noteholders upon the satisfaction of specific conditions and only during certain periods. Thereafter, until the close of business on the second scheduled trading day preceding maturity, the notes will be convertible at the option of the noteholders at any time.

The conversion of the notes will be settled in cash, shares of HomeAway's common stock or a combination of cash and stock.

In connection with the notes offering, HomeAway expects to enter into privately negotiated convertible note hedge transactions to reduce the potential dilution to the company's common stock upon any conversion of notes and/or offset any cash payments.

HomeAway also plans to enter into privately negotiated warrant transactions with the hedge counterparties.

The Austin, Texas-based online vacation rental marketplace expects to use the proceeds to pay the cost of the convertible note hedge transactions and for general corporate purposes.

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