By Abigail W. Adams
Portland, Me., May 3 – Tesla Inc. priced an upsized $1.6 billion of five-year convertible notes after the market close on Thursday at par at the cheap end of talk with a coupon of 2% and an initial conversion premium of 27.5%, according to an FWP filing with the Securities and Exchange Commission.
Price talk was for a coupon of 1.5% to 2% and an initial conversion premium of 27.5% to 32.5%, according to a market source.
Goldman Sachs & Co. LLC and Citigroup Global Markets Inc. were active bookrunners for the registered offering, which carries an upsized greenshoe of $240 million.
Deutsche Bank Securities Inc., BofA Merrill Lynch, Morgan Stanley & Co. LLC, Credit Suisse Securities (USA) LLC, SG Americas Securities LLC and Wells Fargo Securities LLC are joint bookrunners.
The initial size of the offering was for $1.35 billion with a greenshoe of $202.5 million.
The notes are non-callable. They are putable upon a fundamental change.
In connection with the pricing of the notes, Tesla entered into convertible note hedge transactions with a strike price of $607.50.
The notes priced concurrently with an upsized $750 million, or 3,086,419 share, common stock offering, which carries a greenshoe of 462,962 shares.
The common share offering priced at $243.00 per share.
The initial size of the common stock offering was $630 million, or 2,723,198 shares.
CEO Elon Musk will purchase $25 million, or 102,880 shares, of common stock at the public offering price.
Net proceeds from the convertible notes offering are expected to be $1.6 billion, or $1.84 billion if the greenshoe is exercised in full.
Net proceeds from the common share offerings are expected to be $737 million, or $847.6 million if the greenshoe is exercised in full.
Approximately $262.1 million of the proceeds will be used to cover the cost of the call spread.
Remaining proceeds will be used to strengthen the company’s balance sheet and for general corporate purposes.
Tesla is a San Carlos, Calif.-based automotive and energy company.
| Issuer: | Tesla Inc.
|
| Securities: | Convertible senior notes
|
| Amount: | $1.6 billion
|
| Greenshoe: | $240 million
|
| Maturity: | May 15, 2024
|
| Bookrunners: | Goldman Sachs & Co. LLC and Citigroup Global Markets Inc. (active), Deutsche Bank Securities Inc., BofA Merrill Lynch, Morgan Stanley & Co. LLC, Credit Suisse Securities (USA) LLC, SG Americas Securities LLC and Wells Fargo Securities LLC
|
| Coupon: | 2%
|
| Price: | Par
|
| Yield: | 2%
|
| Conversion premium: | 27.5%
|
| Conversion price: | $309.83
|
| Conversion rate: | 3.2276
|
| Call options: | None
|
| Put options: | Upon a fundamental change
|
| Concurrent offering: | $750 million, or 3,086,419 shares
|
| Pricing date: | May 2
|
| Settlement date: | May 7
|
| Distribution: | Registered
|
| Talk: | Coupon of 1.5% to 2% and an initial conversion premium of 27.5% to 32.5%
|
| Stock symbol: | Nasdaq: TSLA
|
| Stock price: | $243.00 in concurrent offering
|
| Market capitalization: | $42.41 billion
|
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