Rapid7 talks $500 million six-year convertible notes to yield 0%-0.25%, up 30%-35%

By Abigail W. Adams

Portland, Me., March 15 – Rapid7 Inc. plans to price $500 million of six-year convertible notes after the market close on Tuesday with price talk for a coupon of 0% to 0.25% and an initial conversion premium of 30% to 35%, according to a market source.

Goldman Sachs & Co. LLC and Barclays are active bookrunners for the Rule 144A offering, which carries a greenshoe of $75 million.

RBC Capital Markets LLC and Citigroup Global Markets Inc. are passive bookrunners.

The notes are non-callable for three years and then subject to a 130% hurdle.

Concurrently, the company will repurchase a portion of its 1.25% convertible notes due 2023 in privately negotiated transactions.

In connection with the new offering, the company will enter into capped call transactions.

Proceeds will be used to cover the cost of the call spread, to fund the repurchase of the 1.25% convertible notes due 2023 and for general corporate purposes.

Rapid7 is a Boston-based cybersecurity company.

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