By Rebecca Melvin
New York, March 26 - HomeAway Inc. priced $350 million of five-year convertible senior notes at par to yield 0.125% with an initial conversion premium of 35%, according to a news release.
Pricing of the Rule 144A deal came toward the rich end of 0% to 0.5% coupon talk and beyond the rich end of 27.5% to 32.5% premium talk.
J.P. Morgan Securities LLC and Deutsche Bank Securities Inc. were joint bookrunners of the offering, for which there is a $52.5 million over-allotment option.
The notes are non-callable for life. They will be settled in cash, shares or a combination of cash and stock.
The deal came with a call spread, or convertible note hedge and warrant transactions. The $81.14 strike on the warrant transactions boosts the conversion premium from the issuer's perspective to 110%.
About $41.4 million of proceeds will be used to pay the cost of the call spread, with remaining proceeds earmarked for general corporate purposes, which may include working capital expenditures, possible stock buybacks and potential acquisitions and strategic transactions.
Austin, Texas-based HomeAway is a vacation rental site.
| Issuer: | HomeAway Inc.
|
| Issue: | Convertible senior notes
|
| Amount: | $350 million
|
| Greenshoe: | $52.5 million
|
| Maturity: | April 1, 2019
|
| Bookrunners: | J.P. Morgan Securities LLC, Deutsche Bank Securities Inc.
|
| Coupon: | 0.125%
|
| Price: | Par
|
| Yield: | 0.125%
|
| Conversion premium: | 35%
|
| Conversion price: | $52.16
|
| Conversion ratio: | 19.1703
|
| Calls: | Non-callable
|
| Puts: | No
|
| Net share settlement: | Yes
|
| Call spread: | Yes, warrant strike of $81.14 boosts conversion premium to 110% from the issuer's perspective
|
| Price talk: | 0%-0.5%, up 27.5%-32.5%
|
| Pricing date: | March 25
|
| Settlement date: | March 31
|
| Distribution: | Rule 144A
|
| Stock symbol: | Nasdaq: AWAY
|
| Stock price: | $38.64 at close March 25
|
| Market capitalization: | $1.35 billion
|
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