By Toni Weeks
San Luis Obispo, Calif., Nov. 20 - Yahoo! Inc. priced an upsized $1.25 billion of 0% convertible senior notes due Dec. 1, 2018 after the market closed on Wednesday.
The Rule 144A deal, which was increased from $1 billion, has a $187.5 million 30-day greenshoe.
The notes were talked to yield 0% to 0.5% with an initial conversion premium of 45% to 50%, as previously reported.
Joint bookrunners are J.P. Morgan Securities LLC, Goldman Sachs & Co., Citigroup Global Markets Inc., BofA Merrill Lynch and Morgan Stanley & Co. LLC.
Settlement is expected Nov. 26.
The notes are non-callable. They are convertible into cash, shares or a combination of cash and shares before Sept. 1, 2018 only under certain circumstances and at any time thereafter.
About $100 million of the proceeds from the bond issue will be used to repurchase shares of common stock from purchasers of the notes. Roughly $70.4 million of the proceeds will also be used to pay for convertible note hedge transactions, which Yahoo! plans to enter into with initial purchasers of the bonds, with the aim of reducing potential dilution upon conversion of the notes.
Remaining proceeds will be used for general corporate purposes, which may include acquisitions and other strategic transactions, additional stock purchases and working capital. Yahoo! may also invest remaining proceeds into short- and long-term marketable securities.
Sunnyvale, Calif.-based Yahoo! is an internet search, content and communications company.
| Issuer: | Yahoo! Inc.
|
| Issue: | Convertible senior notes
|
| Amount: | $1.25 billion, increased from $1 billion
|
| Greenshoe: | $187.5 million
|
| Maturity: | Dec. 1, 2018
|
| Bookrunners: | J.P. Morgan Securities LLC, Goldman Sachs & Co., Citigroup Global Markets Inc., BofA Merrill Lynch and Morgan Stanley & Co. LLC
|
| Coupon: | 0%
|
| Price: | Par
|
| Conversion premium: | 50%
|
| Conversion price: | $53.43
|
| Conversion rate: | 18.7161 shares
|
| Calls: | Non-callable
|
| Price talk: | 0%-0.5%
|
| Pricing date: | Nov. 20
|
| Settlement date: | Nov. 26
|
| Stock symbol: | Nasdaq: YHOO
|
| Stock reference price: | $35.62 at close Nov. 20
|
| Distribution: | Rule 144A
|
| Market capitalization: | $37.11 billion
|
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