By Rebecca Melvin
New York, Jan. 12 - Salesforce.com priced $500 million of five-year convertible bonds late Tuesday to yield 0.75% with an initial conversion premium of 25%, according to a release.
Pricing of the unsecured, unsubordinated bonds came cheaper than initial talk, which was for a yield of 0.5% and a 27.5% initial conversion premium.
There is an over-allotment option to purchase up to an additional $75 million of notes.
Bank of America Merrill Lynch was bookrunner of the Rule 144A offering.
Concurrent with the offering, Salesforce.com entered into privately negotiated convertible note hedge and warrant transactions with hedge counterparties. The strike price of the warrant transactions effectively boosts the initial conversion premium to 175% from the issuer's perspective.
Proceeds will be used to cover the cost of the convertible note hedge transactions and for general corporate purposes, including possible acquisitions of complementary businesses, services or technologies, working capital and capital expenditures.
San Francisco-based Salesforce.com is an enterprise cloud computing company.
| Issuer: | Salesforce.com
|
| Issue: | Convertible bonds
|
| Amount: | $500 million
|
| Greenshoe: | $75 million
|
| Maturity: | Jan. 19, 2015
|
| Bookrunner: | Bank of America Merrill Lynch
|
| Coupon: | 0.75%
|
| Price: | Par of $1,000
|
| Yield: | 0.75%
|
| Conversion premium: | 25%
|
| Conversion price: | $85.36
|
| Conversion ratio: | 11.7147
|
| Call protection: | Non-callable
|
| Puts: | No puts
|
| Net share settlement: | Yes
|
| Price talk: | 0.5%, up 27.5%
|
| Pricing date: | Jan. 12
|
| Settlement date: | Jan. 19
|
| Distribution: | Rule 144A
|
| Stock reference price: | $68.29
|
| Market cap: | $8.53 billion
|
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