Proofpoint talks $750 million five-year convertible bonds to yield 0.25%-0.75%, up 35%-40%

By Rebecca Melvin

New York, Aug. 20 – Proofpoint Inc. was expected to price $750 million of five-year convertible bonds after the market close on Tuesday, according to market sources.

The Rule 144A deal has a $112 million greenshoe and was being sold via joint bookrunners Morgan Stanley & Co. LLC, BofA Securities Inc., Citigroup Global Markets Inc. and Wells Fargo Securities LLC.

Price talk was for a yield between 0.25% and 0.75% and an initial conversion premium of 35% to 40%.

The notes will be non-callable until Aug. 20, 2022 and then provisionally callable at par if shares rise to 130% of the conversion price for at least 20 out of 30 consecutive trading days.

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

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

A portion of the proceeds will be used to pay the cost of capped call transactions that Proofpoint expects to enter into with one or more initial purchasers of the notes or their affiliates. The capped call transactions are expected to reduce the potential dilution upon any conversion of the notes and/or offset any cash payments in excess of the principal amount of the notes.

The bonds mature on Aug. 15, 2024.

Proofpoint is a cyber security company based in Sunnyvale, Calif.

© 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.