Wayfair greenshoe increases 1% convertibles to $948.75 million

By Wendy Van Sickle

Columbus, Ohio, Aug. 19 – Underwriters for Wayfair Inc.’s 1% convertible notes due Aug. 15, 2026 fully exercised their $123.75 million greenshoe, lifting the total deal size to $948.75 million, according to an 8-K filing with the Securities and Exchange Commission.

The company priced an upsized $825 million of the seven-year convertibles prior to the market open on Thursday at par with an initial conversion premium of 32.5%, as previously reported.

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.

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.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.