Wayfair talks $600 million five-year convertible notes to yield 3.25%-3.75%, up 22.5%-27.5%

By Abigail W. Adams

Portland, Me., May 8 – Wayfair Inc. plans to price $600 million of five-year convertible notes after the market close on Tuesday with price talk for a coupon of 3.25% to 3.75% and an initial conversion premium of 22.5% to 27.5%, according to a market source.

Citigroup Global Markets Inc. and Goldman Sachs & Co. LLC are bookrunners for the Rule 144A offering, which carries a greenshoe of $90 million.

The notes are non-callable until May 20, 2026 and then subject to a 130% hurdle.

They will be settled in cash, shares or a combination of both at the company’s option.

In connection with the offering, the company will enter into capped call transactions.

The company will repurchase for cash a portion of its 1.125% convertible notes due 2024, 0.625% convertible notes due 2025 and 1% convertible notes due 2026 in privately negotiated transactions.

Proceeds will be used to cover the cost of the call spread, to fund the repurchase of its outstanding convertible notes and for general corporate purposes.

Wayfair is a Boston-based home decor e-commerce company.

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