By Rebecca Melvin
New York, June 5 - NetApp Inc. priced $1.1 billion of five-year convertible unsecured, unsubordinated notes after the market close Wednesday at par to yield 1.75% with an initial conversion premium of 35%, according to a news release.
Pricing came at the midpoint of talk for the coupon, which was 1.5% to 2%, and at the rich end of talk for the premium, which was 30% to 35%.
Goldman Sachs and Morgan Stanley were joint bookrunners for the Rule 144A deal.
There is a greenshoe of $165 million.
The notes are non-callable, and there are no puts. There is standard dividend and takeover protection and contingent conversion subject to a 130% price hurdle, as well as net share settlement.
With proceeds, NetApp plans to repurchase $273.6 million of stock in negotiated transactions with institutional investors. The company also plans to enter into convertible note hedge transactions with counterparties, which will be paid for with a portion of proceeds, offset by separate warrant transactions with the hedge counterparties.
The warrants have an exercise price of $41.28, which is about 75% above the closing price of NetApp's common stock on June 4.
In connection with the convertible note hedge and warrant transactions, counterparties may enter into various stock derivative transactions that could increase or prevent a decline in the price of the common stock.
Any remaining proceeds after the stock repurchase and the note hedge transactions will be earmarked for general corporate purposes, including capital expenditures, possible future stock repurchases, working capital and potential acquisitions and strategic transactions.
Sunnyvale, Calif.-based NetApp is a data storage company.
| Issuer: | NetApp Inc.
|
| Issue: | Unsecured, unsubordinated convertible notes
|
| Amount: | $1.1 billion
|
| Greenshoe: | $165 million
|
| Maturity: | June 1, 2013
|
| Bookrunners: | Goldman Sachs and Morgan Stanley
|
| Coupon: | 1.75%
|
| Price: | Par
|
| Yield: | 1.75%
|
| Conversion premium: | 35%
|
| Conversion price: | $31.85
|
| Price talk: | 1.75%-2%, up 30%-35%
|
| Call option: | Non-callable
|
| Put option: | None
|
| Contingent conversion: | Yes, 130%
|
| Net share settlement: | Yes
|
| Takeover protection: | Yes
|
| Dividend protection: | Yes
|
| Distribution: | Rule 144A
|
| Pricing date: | June 4
|
| Stock symbol: | Nasdaq: NTAP
|
| Stock price: | $23.59 at close June 4
|
© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere.
For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.
