Proofpoint plans to sell $150 million five-year convertibles to yield 0.75%-1.25%, up 30%-35%

By Rebecca Melvin

New York, June 10 – Proofpoint Inc. launched an offering of $150 million of five-year convertible bonds after the market close Wednesday that were expected to price after the market close Thursday. The notes were talked to yield 0.75% to 1.25% with an initial conversion premium of 30% to 35%, according to market sources.

The Rule 144A offering has a $22.5 million greenshoe.

Joint bookrunners are Credit Suisse Securities (USA) LLC and Citigroup Global Markets Inc.

The notes will be non-callable until June 20, 2018 and then provisionally callable if shares rise to 130% of the conversion price for a specified period. There is dividend and takeover protection via standard conversion rate adjustments.

The bonds will be settled in cash, shares or a combination.

Proceeds are expected to be used for general corporate purposes, including potential acquisitions and strategic transactions.

The bonds mature June 15, 2020.

Proofpoint is a security-as-a-service vendor based in Sunnyvale, Calif.

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