Wayfair greenshoe exercised, ups 1.125% convertibles to $575 million

By Devika Patel

Knoxville, Tenn., Nov. 29 – Underwriters for Wayfair Inc.'s offering of 1.125% six-year convertible senior notes exercised their over-allotment option in full for $75 million more of the notes, increasing the size of the issue to $575 million, the company said in an 8-K filed with the Securities and Exchange Commission.

As previously reported, the company sold the notes at par on Nov. 15 in a sale that settled on Nov. 19. Net proceeds were $562 million.

Citigroup Global Markets Inc. and Goldman Sachs & Co. LLC were joint bookrunners for the Rule 144A deal.

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.

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 décor.

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