Wayfair selling $300 million convertible notes due 2022; price talk 0.625%-1.125%, up 32.5%-37.5%

By Stephanie N. Rotondo

Seattle, Sept. 11 – Wayfair Inc. plans to price a $300 million Rule 144A offering of five-year convertible senior notes, the company said in a press release on Monday.

Price talk is for a 0.625% to 1.125% yield and an initial conversion premium of 32.5% to 37.5%, according to a market source.

Goldman Sachs & Co. and Citigroup Global Markets Inc. are the joint bookrunners.

There is a $45 million over-allotment option.

Conversions will be settled with cash, common stock or a combination of both. The issue is contingently convertible prior to June 1, 2022 and convertible at anytime thereafter.

The company can redeem the issue on or after Sept. 8, 2020, assuming the underlying stock hits a 130% price hurdle.

The convertibles are putable in certain circumstances.

The Boston-based home decor website also said that it expects to enter into privately negotiated capped call transactions with one or more initial purchasers of the notes.

A portion of the deal’s proceeds will be used to cover the capped call transactions. The remaining funds will be used for working capital and general corporate purposes.

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