By Stephanie N. Rotondo
Seattle, Sept. 26 – IAC/InterActiveCorp. priced $450 million of exchangeable senior notes due 2022 (expected ratings: Ba2/BB) through its wholly owned subsidiary, IAC FinanceCo Inc., on Wednesday.
The deal came at par to yield 0.875% with an initial conversion premium of 32.5%, according to a company issued press release.
The yield printed richer than the 1% to 1.5% initial price talk, while the conversion premium came at the rich end of the 27.5% to 32.5% talk.
The size of the deal was increased from $400 million.
J.P. Morgan Securities LLC, Goldman Sachs & Co., BMO Capital Markets, Guggenheim and BofA Merrill Lynch are the bookrunners.
There is a 13-day $67.5 million over-allotment option, an increase of $7.5 million.
Holders can exchange the notes for cash, common stock, or both, at the issuer’s option. The initial conversion rate is 6.5713 shares per each $1,000 of notes, equal to an initial conversion price of $152.18.
The notes have a contingent conversion feature.
The exchangeable notes are redeemable upon certain corporate events. Holders can also put the notes upon a fundamental change.
In connection with the deal, IAC/InterActive entered into privately negotiated exchangeable note hedge transactions with one or more of the initial purchasers of the notes. The company also entered into warrant transactions with the option counterparties.
The warrant’s strike price is $229.70, a 100% premium over the $114.85 closing share price on Sept. 26.
Proceeds will be used, in part, to cover the cost of the hedging transactions. The remaining funds will be used for general corporate purposes, including lending to IAC, which will then use the funds to repay in full its 4.875% senior notes due 2018.
IAC/InterActive is a New York-based media and internet company.
| Issuer: | IAC FinanceCo Inc.
|
| Securities: | Exchangeable senior notes
|
| Amount: | $450 million
|
| Greenshoe: | $67.5 million
|
| Maturity: | Oct. 1, 2022
|
| Bookrunners: | J.P. Morgan Securities LLC, Goldman Sachs & Co., BMO Capital Markets, Guggenheim and BofA Merrill Lynch
|
| Coupon: | 0.875%
|
| Price: | Par of $1,000
|
| Yield: | 0.875%
|
| Initial conversion premium: | 32.5%
|
| Initial conversion price: | $152.18 a share
|
| Initial conversion rate: | 6.5713 shares
|
| Contingent conversion: | Yes
|
| Put options: | Upon a fundamental change at par plus accrued options
|
| Net share settlement: | Yes
|
| Pricing date: | Sept. 27
|
| Settlement date: | Oct. 1
|
| Distribution: | Rule 144A
|
| Talk: | 1%-1.5% yield, up 27.5%-32.5%
|
| Stock symbol: | Nasdaq: IAC
|
| Stock reference price: | $114.85 as of Sept. 26 close
|
| Market capitalization: | $9.33 billion
|
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