By Abigail W. Adams
Portland, Me., Sept. 9 – Wayfair Inc. priced $600 million of five-year convertible notes after the market close on Thursday at par with a coupon of 3.25% and an initial conversion premium of 30%, according to a company news release.
Pricing came at the rich end of talk for a coupon of 3.25% to 3.75% and at the midpoint of talk for an initial conversion premium of 27.5% to 32.5%, according to a market source.
Citigroup Global Markets Inc. and Goldman Sachs & Co. LLC were bookrunners for the Rule 144A offering, which carries a greenshoe of $90 million.
The notes are non-callable until Sept. 20, 2025 and then subject to a 130% hurdle.
There is takeover and dividend protection.
In connection with the offering, the company entered into capped call transactions with a cap price of $97.62, which represents a premium of 100% over the last reported price of stock.
Net proceeds are expected to be $588.6 million or will be $677 million if the greenshoe is exercised in full.
Approximately $69.6 million of net proceeds will be used to fund the call spread and $506.2 million will be used to repurchase a portion of its 1.125% convertible notes due 2024 and 0.625% convertible notes due 2025 in privately negotiated transactions.
The company will repurchase $375.4 million in principal of its 1.125% convertible notes due 2024 for an aggregate amount of $336.8 million and $229 million in principal of its 0.625% convertible notes due 2025 for an aggregate amount of $169.3 million.
Remaining proceeds will be used for working capital and general corporate purposes.
Wayfair is a Boston-based home decor e-commerce company.
| Issuer: | Wayfair Inc.
|
| Amount: | $600 million
|
| Greenshoe: | $90 million
|
| Issue: | Convertible senior notes
|
| Maturity: | Sept. 15, 2027
|
| Bookrunners: | Citigroup Global Markets Inc. and Goldman Sachs & Co. LLC
|
| Coupon: | 3.25%
|
| Price: | Par
|
| Yield: | 3.25%
|
| Conversion premium: | 30%
|
| Conversion price: | $63.45
|
| Conversion rate: | 15.7597
|
| Call options: | Non-callable until Sept. 20, 2025 and then subject to a 130% hurdle
|
| Pricing date: | Sept. 8
|
| Settlement date: | Sept. 13
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| Distribution: | Rule 144A
|
| Talk: | Coupon of 3.25% to 3.75% and initial conversion premium of 27.5% to 32.5%
|
| Stock symbol: | NYSE: W
|
| Stock price: | $48.81 at market close Sept. 8
|
| Market capitalization: | $5.19 billion
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