By Abigail W. Adams
Portland, Me., June 7 – Twitter, Inc. priced $1 billion of six-year convertible notes after the market close on Wednesday with a coupon of 0.25% and an initial conversion premium of 42.5%, according to a company news release.
Pricing came in line with price talk for a coupon of 0.125% to 0.625% and at the midpoint of talk for an initial conversion premium of 40% to 45%, according to a market source.
Morgan Stanley & Co. Inc. is the bookrunner for the Rule 144A deal, which carries a greenshoe of $150 million.
The notes are non-callable.
In connection with the offering, Twitter entered into convertible note hedge and warrant transactions.
The strike price on the warrants is $80.20, which represents a premium of 100% over the last reported sales price of common stock prior to pricing, according to the news release.
Twitter was added to the S&P 500 index on June 7.
The initial purchasers engaged in significant buying and selling activity of Twitter common stock on June 6 in the run up to the addition, according to the news release.
Net proceeds are expected to be $989 million. Approximately $70.6 million will be used to cover the cost of the call spread with the remaining amount to be used for general corporate purposes, which may include the repurchase of the company’s 0.25% convertible notes due 2019 at maturity.
Twitter is a San Francisco-based social networking site.
| Issuer: | Twitter Inc.
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| Securities: | Convertible senior notes
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| Amount: | $1 billion
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| Greenshoe: | $150 million
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| Maturity: | June 15, 2024
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| Bookrunners: | Morgan Stanley & Co. Inc.
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| Coupon: | 0.25%
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| Price: | Par
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| Conversion premium: | 42.5%
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| Conversion price: | $57.14
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| Conversion rate: | 17.5001
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| Call options: | Non-callable
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| Put options: | None
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| Pricing date: | June 6
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| Settlement date: | June 11
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| Talk: | Coupon of 0.125% to 0.625% and initial conversion premium of 40% to 45%
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| Stock symbol: | NYSE: TWTR
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| Stock price: | $40.10
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| Market capitalization: | $30.18 billion
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