Twitter plans to sell $1.3 billion of convertibles in two tranches

By Rebecca Melvin

New York, Sept. 10 – Twitter Inc. launched an offering of $1.3 billion of convertible senior notes in two tranches, including $650 million of five-year convertible senior notes and $650 million of seven-year convertible senior notes. The offering was expected to price after the market close Thursday, according to a syndicate source.

Tranche A was talked with a 0% to 0.5% coupon and tranche B was talked with a 0.75% to 1.25% coupon, both with a 45% to 50% initial conversion premium.

Joint bookrunners are Morgan Stanley & Co. LLC, Goldman Sachs & Co. and J.P. Morgan Securities LLC, with BofA Merrill Lynch and Deutsche Bank Securities Inc. acting as co-managers of the Rule 144A deal.

There is a $200 million greenshoe, or $100 million per tranche.

The notes are non-callable with no puts.

There is contingent conversion if shares exceed 130% of the conversion price and net share settlement.

Proceeds are earmarked for general corporate purposes and also to pay the net cost of a call spread.

Twitter is a San Francisco-based social media website.

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