Wayfair talks $750 million seven-year convertible notes to yield 0.5%-1%, up 32.5%-37.5%

By Abigail W. Adams

Portland, Me., Aug. 13 – Wayfair Inc. plans to price $750 million of seven-year convertible notes after the market close on Wednesday with price talk for a coupon of 0.5% to 1% and an initial conversion premium of 32.5% to 37.5%, according to a market source.

Goldman Sachs & Co. LLC and Citigroup Global Markets Inc. are bookrunners for the Rule 144A offering, which carries a greenshoe of $112.5 million.

The notes are non-callable until Aug. 20, 2023 and then subject to a 130% hurdle with a make-whole.

They are contingently convertible until May 15, 2026.

The notes carry standard dividend and takeover protection.

They are convertible into cash, shares, or a combination of both at the company’s option.

In connection with the pricing of the notes, the company will enter into capped call transactions.

Proceeds will be used to cover the cost of the call spread, for working capital and for general corporate purposes, which may include capital expenditures and acquisitions.

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

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