LinkedIn greenshoe lifts 0.5% five-year convertibles to $1.32 billion

By Toni Weeks

San Luis Obispo, Calif., Nov. 12 – Underwriters for LinkedIn Corp.’s 0.5% five-year convertible senior notes exercised their $172.5 million greenshoe in full, bringing total proceeds to $1,322,500,000.

The company priced $1.15 billion of the convertibles with the greenshoe on Nov. 5 at par to yield 0.5% and with an initial conversion premium of 35%.

Pricing of the Rule 144A deal came at the cheap end of 0% to 0.5% coupon talk and at the cheap end of premium talk that was revised lower during marketing to 35% to 40% from 40% to 45%.

The deal was sold via joint bookrunners Goldman Sachs & Co., J.P. Morgan Securities LLC and Morgan Stanley & Co. LLC.

The notes are non-callable with no puts. There is takeover and dividend protection.

In connection with the pricing of the notes, LinkedIn entered into convertible note hedge and warrant transactions, or a call spread, with initial purchasers of the bonds.

The strike on the warrant transactions is $381.82, which boosts the initial conversion premium from the issuer’s perspective to 75%.

About $70.2 million of the proceeds will be used to pay the net cost of the call spread with remaining proceeds earmarked for general corporate purposes.

LinkedIn is a business-oriented social networking service based in Mountain View, Calif.

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