LendingTree greenshoe exercised, brings convertibles to $300 million

By Marisa Wong

Morgantown, W.Va., May 31 – The underwriters of LendingTree Inc.’s recent offering of 0.625% convertible senior notes due 2022 exercised their over-allotment option in full on May 25, bringing the total deal size to $300 million, according to an 8-K filed Wednesday with the Securities and Exchange Commission.

The company priced $265 million of the convertible notes on May 24 at par with an initial conversion premium of 32.5%, as previously announced.

The deal came upsized from $200 million, with the greenshoe increased to $35 million from $30 million.

The yield was priced in the middle of the 0.5% to 1% yield talk and at the rich end of the 27.5% to 32.5% premium talk.

BofA Merrill Lynch, Goldman Sachs & Co., RBC Capital Markets and SunTrust Robinson Humphrey Inc. are the joint bookrunners.

Conversions will be settled in cash, common stock or a combination of the two, at the company’s election. The conversion rate is 4.8163 shares per each $1,000 of notes, or $207.63 a share.

Prior to Feb. 1, 2022, the bonds are contingently convertible if the stock hits a 130% price hurdle. After that date, the paper can be converted at any time.

In connection with the offering, the company entered into convertible note hedge and warrant transactions.

The company sold warrants for 1.4 million shares of common stock, exercisable at an initial strike price of $266.39 a share, a 70% premium over the May 24 closing price.

On May 31, the company paid a total of $61.5 million for the convertible note hedge transactions, using $18.1 million of proceeds from the notes and $43.4 million from the sale of warrants.

LendingTree is a Charlotte, N.C.-based online loan marketplace.

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