By Abigail W. Adams
Portland, Me., April 29 – Rapid7 Inc. priced $200 million of five-year convertible notes after the market close on Tuesday at par at the midpoint of talk with a coupon of 2.25% and an initial conversion premium of 30%, according to a company news release.
Price talk was for a coupon of 2% to 2.5% and an initial conversion premium of 27.5% to 32.5%, according to a market source.
Barclays (lead left) and RBC Capital Markets LLC were active bookrunners for the Rule 144A offering, which carries a greenshoe of $30 million.
KeyBanc Capital Markets Inc. was a passive bookrunner.
The notes are non-callable until May 6, 2023 and then subject to a 130% hurdle.
There is dividend protection.
In connection with the pricing of the convertible notes, the company entered into capped call transactions with a cap price of $93.88, which represents a premium of 100% over the last reported sales price of stock.
Net proceeds are expected to be $194 million or $223.2 million if the greenshoe is exercised in full.
Approximately $23.7 million of the proceeds will be used to cover the cost of the call spread with the remaining amount to be used for general corporate purposes.
Rapid7 is a Boston-based cybersecurity company.
| Issuer: | Rapid7 Inc.
|
| Securities: | Convertible senior notes
|
| Amount: | $200 million
|
| Greenshoe: | $30 million
|
| Maturity: | May 1, 2025
|
| Bookrunners: | Barclays (lead left), RBC Capital Markets LLC and KeyBanc Capital Markets Inc.
|
| Coupon: | 2.25%
|
| Price: | Par
|
| Yield: | 2.25%
|
| Conversion premium: | 30%
|
| Conversion price: | $61.02
|
| Conversion rate: | 30%
|
| Call options: | Non-callable until May 6, 2023 and then subject to a 130% hurdle
|
| Pricing date: | April 28
|
| Settlement date: | May 1
|
| Distribution: | Rule 144A
|
| Talk: | Coupon of 2% to 2.5% and initial conversion premium of 27.5% to 32.5%
|
| Stock symbol: | Nasdaq: RPD
|
| Stock price: | $46.94 at market close April 28
|
| Market capitalization: | $2.22 billion
|
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