Rapid7 talks $175 million five-year convertible notes to yield 0.75% to 1.25%, up 30% to 35%

By Abigail W. Adams

Portland, Me., Aug. 7 – Rapid7, Inc. plans to price $175 million in five-year convertible notes after the market close on Wednesday with price talk for a coupon of 0.75% to 1.25% and an initial conversion premium of 30% to 35%, according to a market source.

Barclays Capital Inc. and RBC Capital Markets are bookrunners for the Rule 144A deal, which carries a greenshoe of $26.25 million.

Conversions will be settled in cash, shares or a combination of both at the company’s option, according to a company news release.

In connection with the pricing, Rapid7 will enter into capped call transactions.

Proceeds from the convertibles will be used to cover the cost of the call spread, for working capital and for general corporate purposes.

Rapid7 is a Boston-based tech security operations company providing vulnerability management and compliance solutions.

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