By Rebecca Melvin
New York, Oct. 24 - SanDisk Corp. priced an upsized $1.3 billion of seven-year convertible senior notes at par late Wednesday to yield 0.5% with an initial conversion premium of 35%, according to a syndicate source.
The Rule 144A deal was initially expected to be $1 billion in size, and pricing came at the talked price points that were tightened during marketing from a 0.75% to 1.25% yield and a 30% to 35% premium.
Goldman Sachs & Co. was the bookrunner for the non-callable notes, which have a greenshoe for up to another $200 million of notes, upsized from $150 million.
The notes have full dividend protection in the form of a conversion rate adjustment for any quarterly dividend in excess of $0.225 per share, as well as takeover protection.
A portion of the proceeds is being used to fund the cost of a call spread, which increases the effective conversion price of the debt from the issuer's perspective. The warrant strike is $122.922.
Proceeds will also be used to repurchase shares of common stock from purchasers of the notes and for repayment of debt at maturity or via repurchases from time to time. In addition, proceeds will be used for potential strategic investment or acquisitions, to repurchase common stock under existing stock repurchase programs and for other general corporate purposes, including capital expenditures relating to manufacturing and technology.
SanDisk is a Sunnyvale, Calif.-based maker of flash storage cards used in consumer electronics.
| Issuer: | SanDisk Corp.
|
| Issue: | Convertible senior notes
|
| Amount: | $1.3 billion, upsized from $1 billion
|
| Greenshoe: | $200 million, upsized from $150 million
|
| Maturity: | Oct. 15, 2020
|
| Bookrunner: | Goldman Sachs & Co.
|
| Coupon: | 0.5%
|
| Price: | Par
|
| Yield: | 0.5%
|
| Conversion premium: | 35%
|
| Conversion price: | $92.19
|
| Conversion ratio: | 10.84 shares
|
| Calls: | Non-callable
|
| Puts: | No puts
|
| Call spread: | Yes, warrant strike $122.922
|
| Takeover protection: | Yes
|
| Dividend protection: | Yes, conversion rate adjustment for any quarterly dividend in excess of $0.225 per share
|
| Price talk: | 0.5%, up 35%, revised from 0.75%-1.25%, up 30%-35%
|
| Pricing date: | Oct. 23
|
| Settlement date: | Oct. 29
|
| Stock symbol: | Nasdaq: SNDK
|
| Stock reference price: | $68.29 at close Oct. 23
|
| Distribution: | Rule 144A
|
| Market capitalization: | $15.71 billion
|
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