By Rebecca Melvin
New York, March 13 - Salesforce.com priced $1 billion of five-year convertible senior notes after the market close on Tuesday at par to yield 0.25% with an initial conversion premium of 47%, according to a syndicate source.
The Rule 144A offering has a $150 million over-allotment option and was sold via joint bookrunners Morgan Stanley & LLC and BofA Merrill Lynch.
Pricing came at the cheap end of talk, which was for a 0% to 0.25% coupon and a 47% to 52% premium.
The bonds are non-callable. Upon conversion the notes will be settled in cash and shares of Salesforce.com common stock.
Proceeds will be used for general corporate purposes, including acquisitions and investments in complementary businesses, working capital and capital expenditures.
Proceeds will also be used to pay the cost of convertible note hedge transactions entered into in connection with the offering, aimed at reducing potential dilution of the stock upon conversion of the notes. The strike price of the warrant transactions will initially be about $361.58 per share, which raises the initial conversion premium from the issuer's perspective to 200%.
San Francisco-based Salesforce.com develops cloud computing applications for businesses.
| Issuer: | Salesforce.com
|
| Issue: | Convertible senior notes
|
| Amount: | $1 billion
|
| Greenshoe: | $150 million
|
| Maturity: | April 1, 2018
|
| Bookrunners: | Morgan Stanley & Co. LLC, BofA Merrill Lynch
|
| Co-managers: | Goldman Sachs & Co., Wells Fargo Securities LLC
|
| Coupon: | 0.25%
|
| Price: | Par
|
| Yield: | 0.25%
|
| Conversion premium: | 47%
|
| Conversion price: | $265.76
|
| Conversion ratio: | 3.7628
|
| Calls: | Non-callable
|
| Puts: | No puts
|
| Takeover protection: | Yes
|
| Dividend protection: | Yes
|
| Call spread: | Yes, warrant strike price $361.58
|
| Price talk: | 0%-0.25%, up 47%-52%
|
| Pricing date: | March 12
|
| Settlement date: | March 18
|
| Stock symbol: | NYSE: CRM
|
| Stock price: | $180.79 at close March 12
|
| Distribution: | Rule 144A
|
| Market capitalization: | $26.2 billion
|
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