By Abigail W. Adams
Portland, Me., Dec. 10 – Lumentum Holdings Inc. priced an upsized $900 million of seven-year convertible notes after the market close on Monday at par to yield 0.5% with an initial conversion premium of 42.5%, according to a company news release.
Pricing came at the midpoint of talk for a coupon of 0.25% to 0.75% and an initial conversion premium of 40% to 45%, according to a market source.
Goldman Sachs & Co. LLC was the bookrunner on the Rule 144A offering, which carries an upsized greenshoe of $200 million.
The initial size of the deal was $850 million with a greenshoe of $127.5 million.
The notes are contingently convertible until Sept. 15, 2026. The notes will be settled in cash, shares or a combination of both at the company’s option.
The notes are callable on or after Dec. 20, 2023 subject to a 130% hurdle.
Approximately $200 million of the proceeds will be used for a stock buyback, $196 million will be used to repay the company’s term loan, with the remaining amount to be used for general corporate purposes.
Lumentum is a San Jose, Calif., designer and manufacturer of optical and photonic products.
| Issuer: | Lumentum Holdings Inc.
|
| Securities: | Convertible senior notes
|
| Amount: | $900 million
|
| Greenshoe: | $200 million
|
| Maturity: | Dec. 15, 2026
|
| Bookrunner: | Goldman Sachs & Co. LLC
|
| Coupon: | 0.5%
|
| Price: | Par
|
| Yield: | 0.5%
|
| Conversion premium: | 42.5%
|
| Conversion price: | $99.29
|
| Conversion rate: | 10.0711
|
| Call options: | Non-callable until Dec. 20, 2023 then subject to a 130% hurdle
|
| Put options: | None
|
| Pricing date: | Dec. 9
|
| Settlement date: | Dec. 12
|
| Distribution: | Rule 144A
|
| Talk: | Coupon of 0.25% to 0.75% and an initial conversion premium of 40% to 45%
|
| Stock symbol: | Nasdaq: LITE
|
| Stock price: | $69.68 at market close Dec. 9
|
| Market capitalization: | $5.39 billion
|
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