By Rebecca Melvin
New York, Nov. 10 – Square Inc. priced $1 billion of convertible senior notes in two tranches, each with an initial conversion premium of 62.5%, according to a company news release on Tuesday.
The $500 million of convertible notes due May 1, 2026 priced with a 0% coupon, and the $500 million of convertible notes due Nov. 1, 2027 priced with a 0.25% coupon.
Price talk for the 2026 notes tightened to a fixed coupon of 0% and an initial conversion premium of 60% to 65%, from initial talk was for a 0% to 0.25% coupon and initial conversion premium of 55% to 60%.
Price talk for the 2027 notes tightened to a fixed coupon of 0.25% and an initial conversion premium of 60% to 65%, from 0.25% to 0.75% initial coupon talk and an initial conversion premium of 55% to 60%.
There is a $75 million greenshoe for each tranche.
Goldman Sachs & Co. LLC is the bookrunner for the Rule 144A offering.
In connection with the pricing of the notes, the company entered into a call spread, or convertible note hedge and warrant transactions, with some of the initial purchasers of the notes. The strike on the warrant transactions is initially $368.16 per share and $414.18 per share, representing a premium of 100% and 125%, respectively, from the issuer’s perspective.
About $49 million of the proceeds will be used to pay the cost of the call spread, and the remaining proceeds will be used for general corporate purposes.
Square is a San Francisco-based financial services and mobile payment company.
| Issuer: | Square Inc.
|
| Securities: | Convertible senior notes
|
| Amount: | $1 billion
|
| Greenshoes: | $150 million
|
| Bookrunner: | Goldman Sachs & Co. LLC
|
| Conversion premium: | 62.5%
|
| Conversion price: | $299.13
|
| Conversion rate: | 3.3430
|
| Call spread: | Yes, at $299.13 warrant strike
|
| Pricing date: | Nov. 9
|
| Settlement date: | Nov. 13
|
| Distribution: | Rule 144A
|
| Stock symbol: | NYSE: SQ
|
| Stock price: | $184.08 at market close Nov. 9
|
| Market capitalization: | $35.11 billion
|
|
|
| 2026 notes
|
| Amount: | $500 million
|
| Greenshoe: | $75 million
|
| Maturity: | May 1, 2026
|
| Coupon: | 0%
|
| Price: | Par
|
| Yield: | 0%
|
| Call options: | Non-callable until Nov. 5, 2023, then provisionally callable at 130% price hurdle
|
| Initial talk: | 0%-0.25%, up 55%-60%
|
|
|
| 2027 notes
|
| Amount: | $500 million
|
| Greenshoe: | $75 million
|
| Maturity: | Nov. 1, 2027
|
| Coupon: | 0.25%
|
| Price: | Par
|
| Yield: | 0.25%
|
| Conversion premium: | 50%
|
| Call options: | Non-callable until March 5, 2024, then provisionally callable at 130%
|
| Initial talk: | 0.25%-0.75%, up 55%-60%
|
|
|
© 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.
