IAC/InterActive talks $1 billion exchangeable notes in two tranches

By Abigail W. Adams

Portland, Me., May 20 – IAC/InterActive Corp. plans to price a $1 billion two-tranche convertible notes offering after the market close on Tuesday.

The offering consists of $500 million of seven-year exchangeable notes, which are talked to yield 1% to 1.5% with an initial exchange premium of 27.5% to 32.5%, according to a market source.

The notes will be issued by IAC Finance Co. 2, Inc.

The offering also consists of a $500 million tranche of exchangeable notes due 2030, which are talked to yield 1.75% to 2.25% with an initial exchange premium of 27.5% to 32.5%.

The notes will be issued by IAC Finance Co. 3, Inc.

Both tranches are convertible into IAC common shares.

J.P. Morgan Securities LLC and Goldman Sachs & Co. LLC are joint bookrunners for the Rule 144A offerings with both tranches carrying a greenshoe of $75 million.

The seven-year notes are non-callable for four years and then subject to a 130% hurdle with a make-whole.

The exchangeable notes due 2030 are non-callable for seven years and then subject to a 130% hurdle with a make-whole.

Both tranches have takeover and dividend protection.

In connection with the pricing of the notes, the company will enter into convertible note hedge and warrant transactions.

Proceeds will be used to cover the cost of the call spread and for general corporate purposes.

IAC is a New York-based media and internet holding company.

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