By Abigail W. Adams
Portland, Me., Nov. 15 – Wayfair Inc. priced $500 million of six-year convertible notes prior to the market open on Thursday at the cheap end of talk at par with a coupon of 1.125% and an initial conversion premium of 32.5%, according to a company press release.
Price talk had been for a coupon of 0.625% to 1.125% and an initial conversion premium of 32.5% to 37.5%, according to a market source.
Citigroup Global Markets Inc. and Goldman Sachs & Co. LLC are joint bookrunners for the Rule 144A deal, which carries a greenshoe of $75 million.
The notes are contingently convertible until Aug. 1, 2024 subject to a 130% trigger. They are non-callable until May 8, 2022 and then subject to a 130% hurdle.
The notes may be settled in cash, shares or a combination of both at the company’s option. There is dividend and takeover protection.
In connection with the pricing of the notes, the company entered into convertible note hedge transactions with a cap price of $219.625, representing a premium of 150% over the last reported sales price of the stock.
Net proceeds are expected to be $488.7 million, or $562 million if the greenshoe is exercised in full.
Of the net proceeds, $81.3 million will be used to cover the cost of the call spread with the remaining amount for working capital and for general corporate purposes.
Wayfair is a Boston-based e-commerce company focused on home decor.
| Issuer: | Wayfair Inc.
|
| Securities: | Convertible senior notes
|
| Amount: | $500 million
|
| Greenshoe: | $75 million
|
| Maturity: | Nov. 1, 2024
|
| Bookrunners: | Citigroup Global Markets Inc. and Goldman Sachs & Co. LLC
|
| Coupon: | 1.125%
|
| Price: | Par
|
| Yield: | 1.125%
|
| Conversion premium: | 32.5%
|
| Conversion price: | $116.40
|
| Conversion rate: | 8.5910
|
| Call options: | Non-callable until May 8, 2022 then subject to a 130% hurdle
|
| Put options: | Upon a fundamental change
|
| Pricing date: | Nov. 15
|
| Settlement date: | Nov. 19
|
| Distribution: | Rule 144A
|
| Talk: | Coupon of 0.625% to 1.125% and initial conversion premium of 32.5% to 37.5%
|
| Stock symbol: | NYSE: W
|
| Stock price: | $87.85
|
| Market capitalization: | $7.94 billion
|
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