Q2 Holdings ups offering of seven-year convertibles to $275 million, tightens price talk

By Abigail W. Adams

Portland, Me., June 5 – Q2 Holdings Inc. upsized its offering of seven-year convertible notes to $275 million and tightened talk to a coupon of 0.75% to 0.875% and an initial conversion premium of 27.5%, according to a market source.

The deal is set to price after the market close on Wednesday.

Initial price talk was for a coupon of 0.75% to 1.25% and an initial conversion premium of 25% to 30%, according to a market source.

Morgan Stanley & Co. LLC, J.P. Morgan Securities LLC, Stifel, Nicolas & Co. Inc. and BMO Capital Markets Corp. are the bookrunners for the Rule 144A offering, which carries an upsized greenshoe of $41.25 million.

The initial size of the deal was $200 million with a greenshoe of $30 million.

The notes are non-callable for four years and then subject to a 130% hurdle. They are contingently convertible until March 1, 2026.

There is takeover and dividend protection. The notes will be settled in cash, shares or a combination of both at the company’s option.

The notes are pricing concurrently with a $155 million, or 2.15 million share, common stock offering. The common stock offering carries a greenshoe of 322,500 shares.

In connection with the pricing of the convertible notes, the company will enter into convertible note hedge and warrant transactions.

Proceeds will be used to cover the cost of the call spread and for general corporate purposes, including strategic acquisitions and transactions.

Q2 Holdings is an Austin, Tex.-based digital banking platform.

© 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.