By Wendy Van Sickle
Columbus, Ohio, June 11 – Vonage Holdings Corp. priced $300 million of 1.75% convertible senior notes due 2024 on Tuesday with an initial conversion premium of 42.5%, according to a press release.
Pricing came in the middle of talk for a coupon of 1.5% to 2% and an initial conversion premium of 40% to 45%.
J.P. Morgan Securities LLC and Morgan Stanley & Co. LLC are the bookrunners for the Rule 144A offering, which carries a greenshoe of $45 million.
The notes are non-callable until June 5, 2022 and then subject to a 130% hurdle with a make-whole.
In connection with the pricing of the notes, Vonage entered into capped call transactions. The cap price of the capped call transactions will initially be $23.46, a 100% premium over the stock closing price on June 11.
Proceeds will be used to cover the cost of the call spread, to repurchase up to $10 million in common stock and to repay a portion of its balance under its credit facility.
Vonage is a Holmdel, N.J.-based cloud communications provider.
| Issuer: | Vonage Holdings Corp.
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| Issue: | Convertible senior notes
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| Amount: | $300 million
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| Greenshoe: | $45 million
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| Maturity: | June 1, 2024
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| Bookrunners: | J.P. Morgan Securities LLC and Morgan Stanley & Co. LLC
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| Coupon: | 1.75%
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| Conversion premium: | 42.5%
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| Conversion price: | $16.72
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| Conversion rate: | 59.8256
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| Call options: | Non-callable until June 5, 2022 and then subject to a 130% hurdle with a make-whole
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| Pricing date: | June 11
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| Settlement date: | June 14
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| Distribution: | Rule 144A
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| Talk: | Coupon of 1.5% to 2% and an initial conversion premium of 40% to 45%
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| Stock symbol: | NYSE: VG
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| Stock price: | $11.73 at market close June 11
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| Market capitalization: | $2.84 billion
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