By Abigail W. Adams
Portland, Me., March 2 – Twitter Inc. priced $1.25 billion of five-year convertible notes after the market close on Monday at par with a coupon of 0% and an initial conversion premium of 67.5%, according to a company news release.
Pricing came in line with talk for a fixed coupon of 0% and at the midpoint of talk for an initial conversion premium of 65% to 70%, according to a market source.
Goldman Sachs & Co. LLC, Morgan Stanley & Co. LLC and J.P. Morgan Securities LLC are joint bookrunners for the Rule 144A offering, which carries a greenshoe of $187.5 million.
The notes will be settled in cash, shares or a combination of both at the company’s option.
In connection with the offering, the company entered into convertible note hedge and warrant transactions.
The strike price on the warrant transactions is $163.02, which represents a premium of 110% over the last reported sales price of stock.
Net proceeds are expected to be $1,235,400,000 assuming no exercise of the greenshoe.
Approximately $45.5 million of proceeds will be used to cover the cost of the convertible note hedge transactions with remaining proceeds to be used to cover the amounts due upon the conversion or maturity of the company’s 1% convertible notes due Sept. 15, 2021.
Twitter is a San Francisco-based social networking service.
| Issuer: | Twitter Inc.
|
| Securities: | Convertible senior notes
|
| Amount: | $1.25 billion
|
| Greenshoe: | $187.5 million
|
| Maturity: | March 15, 2026
|
| Bookrunners: | Goldman Sachs & Co. LLC, Morgan Stanley & Co. LLC and J.P. Morgan Securities LLC
|
| Coupon: | 0%
|
| Price: | Par
|
| Yield: | 0%
|
| Conversion premium: | 67.5%
|
| Conversion price: | $130.03
|
| Conversion rate: | 7.6905
|
| Pricing date: | March 1
|
| Settlement date: | March 4
|
| Distribution: | Rule 144A
|
| Talk: | Fixed coupon of 0% and initial conversion premium of 65% to 70%
|
| Stock symbol: | NYSE: TWTR
|
| Stock price: | $77.65 at market close March 2
|
| Market capitalization: | $60.92 billion
|
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