Verint greenshoe ups 1.5% seven-year convertibles deal to $400 million

By Susanna Moon

Chicago, June 18 – Verint Systems Inc. underwriters fully exercised the $50 million over-allotment option on its 1.5% seven-year convertible notes, bringing the total deal size to $400 million, according to an 8-K filing with the Securities and Exchange Commission.

As previously reported, Verint priced an upsized $350 million of the convertibles on June 13 at par to yield 1.5% with an initial conversion premium of 35%.

The registered, off-the-shelf deal was initially talked at $300 million in size. Pricing came through the rich end of coupon talk, which was 1.75% to 2.25%, and at the rich end of 30% to 35% premium talk.

Verint also priced 5 million shares of common stock at $47.75 per share.

The greenshoe was upsized from $45 million.

The joint bookrunners were Deutsche Bank Securities Inc., Goldman Sachs & Co., Credit Suisse Securities (USA) LLC, RBC Capital Markets LLC, Barclays and HSBC Securities (USA) Inc.

The notes are non-callable and have takeover protection. Prior to Dec. 1, 2020, they are convertible if shares exceed 130% of the conversion price for a specified period. Beginning Dec. 1, 2020, they are freely convertible.

In connection with the notes offering, Verint entered into convertible note hedge and warrant transactions, or a call spread. The strike on the warrants is $75.00 per share, which boosts the initial conversion premium to 57% from the issuer’s perspective.

Proceeds of both the notes and stock offerings will be used to repay amounts outstanding under the company’s existing credit facility. Proceeds will also be used to fund the net cost of the call spread.

Melville, N.Y.-based Verint is a software and hardware analytics company that provides security, surveillance and business intelligence.

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