By Abigail W. Adams
Portland, Me., Aug. 15 – Wayfair Inc. priced an upsized $825 million of seven-year convertible notes prior to the market open on Thursday at par with a coupon of 1% and an initial conversion premium of 32.5%, according to a company news release.
Pricing came at the cheap end of 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 an upsized greenshoe of $123.75 million.
The initial size of the deal was $750 million with 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 are putable upon certain corporate events and carry standard dividend 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 entered into capped call transactions with a cap price of $280.15, which represents a premium of 150% over the last reported sales price of the company’s stock.
Net proceeds are expected to be $813.2 million, or $935.2 million if the greenshoe is exercised in full.
Approximately $126.7 million of the proceeds will be used to cover the cost of the call spread with the remaining amount to be used 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.
| Issuer: | Wayfair Inc.
|
| Securities: | Convertible senior notes
|
| Amount: | $825 million
|
| Greenshoe: | $123.75 million
|
| Maturity: | Aug. 15, 2026
|
| Bookrunners: | Goldman Sachs & Co. LLC and Citigroup Global Markets Inc.
|
| Coupon: | 1%
|
| Price: | Par
|
| Yield: | 1%
|
| Conversion premium: | 32.5%
|
| Conversion price: | $148.48 per share
|
| Conversion rate: | 6.7349
|
| Call options: | Non-callable until Aug. 20, 2023 and then subject to a 130% hurdle
|
| Put options: | Upon a fundamental change
|
| Pricing date: | Aug. 15
|
| Settlement date: | Aug. 19
|
| Distribution: | Rule 144A
|
| Talk: | Coupon of 0.5% to 1% and initial conversion premium of 32.5% to 37.5%
|
| Stock symbol: | NYSE: W
|
| Stock price: | $112.06 at market close Aug. 15
|
| Market capitalization: | $10.35 billion
|
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