By Abigail W. Adams
Portland, Me., June 14 – Lumentum Holdings Inc. priced an upsized $525 million of long six-year convertible notes after the market close on Tuesday at par at the midpoint of talk with a coupon of 1.5% and an initial conversion premium of 30%, according to a market source and a company news release.
Price talk was for a coupon of 1.25% to 1.75% and an initial conversion premium of 27.5% to 32.5%, according to a market source.
Goldman Sachs & Co. LLC and Deutsche Bank Securities Inc. are bookrunners for the Rule 144A offering, which carries an upsized greenshoe of $78.75 million.
The initial size of the offering was $500 million with a greenshoe of $75 million.
The notes are non-callable until June 22, 2026 and then subject to a 130% hurdle.
There is takeover and dividend protection.
The notes will be settled in cash, shares or a combination of both at the company’s option.
Net proceeds are expected to be $520.1 million or will be $598.2 million if the greenshoe is exercised in full.
Approximately $132.8 million of net proceeds will be used to repurchase $125 million in principal of its 0.25% convertible notes due 2024 and $125 million will be used for the purchase of common stock in privately negotiated transactions.
Remaining proceeds will be used for general corporate purposes, which may include the repayment or repurchase of debt.
Lumentum is a San Jose, Calif.-based designer and manufacturer of optical and photonic products.
| Issuer: | Lumentum Holdings Inc.
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| Amount: | $525 million
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| Greenshoe: | $78.75 million
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| Issue: | Convertible senior notes
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| Maturity: | Dec. 15, 2029
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| Bookrunners: | Goldman Sachs & Co. LLC and Deutsche Bank Securities Inc.
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| Coupon: | 1.5%
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| Price: | Par
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| Yield: | 1.5%
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| Conversion premium: | 30%
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| Conversion price: | $69.54
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| Conversion rate: | 14.3808
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| Call options: | Non-callable until June 22, 2026 and then subject to a 130% hurdle
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| Put options: | Upon a fundamental change
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| Pricing date: | June 13
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| Settlement date: | June 16
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| Distribution: | Rule 144A
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| Talk: | Coupon of 1.25% to 1.75% and initial conversion premium of 27.5% to 32.5%
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| Stock symbol: | Nasdaq: LITE
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| Stock price: | $53.49 at market close June 13
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| Market capitalization: | $3.67 billion
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