Inseego talks $100 million five-year convertible notes to yield 2.75%-3.25%, up 20%-25%

By Abigail W. Adams

Portland, Me., May 7 – Inseego Corp. plans to price $100 million of five-year convertible notes after the market close on Thursday with price talk for a coupon of 2.75% to 3.25% and an initial conversion premium of 20% to 25%, according to a market source.

Stifel, Nicolaus & Co. Inc. is the bookrunner for the registered offering, which carries a greenshoe of $15 million.

The notes are non-callable until May 6, 2023 and then subject to a 130% hurdle.

The notes are putable upon a fundamental change.

In addition to the registered offering, Golden Harbor Ltd. and North Sound trading LP will exchange an aggregate principal amount of $44,816,000 of the company’s 5.5% notes due 2022 for cash and $75 million of the new notes.

Following the exchange, the 5.5% notes due 2022 will have $152 million outstanding.

Approximately $49.3 million of net proceeds will be used to terminate the company’s existing credit agreement, $2.3 million will be used to repurchase the series E preferred stock issued to South Ocean, with the remaining amount to fund the cash portion of the privately negotiated exchange and for general corporate purposes.

Inseego is a San Diego-based 5G and internet-of-things company.

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