Workday plans to price $440 million of convertibles in two tranches

By Rebecca Melvin

New York, June 10 - Workday Inc. launched a $440 million offering of convertible bonds, including a $220 million tranche of five-year convertibles and a $220 million tranche of seven-year paper. Each of the Rule 144A tranches has a $30 million greenshoe.

Pricing is expected to occur Tuesday after the market close. The five-year notes were talked with a 0.5% to 1% coupon and 32.5% to 37.5% initial conversion premium. And the five-year notes were talked at the same premium but with a higher coupon range of 1% to 1.5%.

Both issues will be non-callable with no puts. They will have contingent conversion at a price hurdle of 130%. They also have dividend protection.

In connection with the pricing of the notes, Workday plans to enter into a call spread with initial purchasers of the bonds.

Morgan Stanley & Co. LLC, Goldman Sachs & Co. and Barclays are joint bookrunners of the deal.

Proceeds will be used for general corporate purposes, with a portion retained to pay the cost of the call spread.

Pleasanton, Calif.-based Workday is a cloud-based human resources and finance company.

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