By Rebecca Melvin
New York, Aug. 21 – Proofpoint Inc. priced an upsized $800 million of 0.25% five-year convertible bonds after the market close on Tuesday at par with an initial conversion premium of 37.5%, according to a company news release.
The Rule 144A offering was upsized from an expected $750 million deal size.
There is a $120 million greenshoe, which was increased from $112 million.
The notes were talked to yield 0.25% to 0.75% with an initial conversion premium of 35% to 40%, according to market sources.
The joint bookrunners are Morgan Stanley & Co. LLC, BofA Securities Inc., Citigroup Global Markets Inc. and Wells Fargo Securities LLC.
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 is being used to pay the cost of capped call transactions that Proofpoint entered into with one or more initial purchasers of the notes or their affiliates. The cap price of the capped call transactions will initially be $223.98 per share, which represents a premium of approximately 100% over the last reported sale price of Proofpoint’s common stock.
The bonds mature on Aug. 15, 2024.
Proofpoint is a cyber security company based in Sunnyvale, Calif.
| Issuer: | Proofpoint Inc.
|
| Issue: | Convertible senior notes
|
| Amount: | $800 million, upsized from $750 million
|
| Greenshoe: | $120 million, upsized from $112 million
|
| Maturity: | Aug. 15, 2024
|
| Bookrunners: | Morgan Stanley & Co. LLC, BofA Securities Inc., Citigroup Global Markets Inc. and Wells Fargo Securities LLC
|
| Coupon: | 0.25%
|
| Price: | Par
|
| Yield: | 0.25%
|
| Conversion premium: | 37.5%
|
| Conversion price: | $153.99
|
| Conversion ratio: | 6.4941
|
| Call option: | At par beginning Aug. 20, 2022, subject to 130% share price hurdle
|
| Put option: | At par if a fundamental change occurs
|
| Contingent conversion: | Prior to April 15, 2024
|
| Net share settlement: | Yes
|
| Capped call transactions: | Yes, at $223.98
|
| Pricing date: | Aug. 20
|
| Settlement date: | Aug. 23
|
| Distribution: | Rule 144A
|
| Price talk: | 0.25%-0.75% yield, up 35%-40%
|
| Stock listing: | Nasdaq: PFPT
|
| Share price: | $111.99 at close Aug. 20
|
| Market capitalization: | $6.28 billion
|
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