By Abigail W. Adams
Portland, Me., May 15 – Twilio Inc. priced an upsized $475 million of five-year convertible notes after the market close on Monday with a coupon of 0.25% and an initial conversion premium of 35%, according to a company news release.
Pricing came at the mid-point of talk for a coupon of 0% to 0.5% and at the rich end of talk for an initial conversion premium of 30% to 35%, according to a market source.
Goldman Sachs & Co., J.P. Morgan Securities LLC and Deutsche Bank Securities LLC are joint bookrunners for the Rule 144A offering, which carries an upsized greenshoe of $75 million.
The initial size of the deal had been $435 million with a greenshoe of $65 million.
The notes are non-callable until June 1, 2021 and then may be redeemed from June 1, 2021 to March 1, 2023 subject to a 130% hurdle with a make-whole.
Holders may require the company to redeem the notes upon a fundamental change.
Conversions will be settled in cash, shares or a combination of both, at the company’s option.
In connection with the offering, Twilio will enter into capped call transactions.
The cap price will initially be $105.04, which represents a 100% premium over the last reported sales price of stock, according to the news release.
Net proceeds are expected to be $463.3 million, assuming the greenshoe is not exercised. Proceeds will be used to cover the cost of the call spread and for general corporate purposes.
Twilio is a San Francisco-based cloud communications platform service company.
| Issuer: | Twilio Inc.
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| Securities: | Convertible senior notes
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| Amount: | $475 million
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| Greenshoe: | $75 million
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| Maturity: | June 1, 2023
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| Bookrunners: | Goldman Sachs & Co., J.P. Morgan Securities LLC and Deutsche Bank Securities LLC
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| Coupon: | 0.25%
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| Price: | Par
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| Conversion premium: | 35%
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| Conversion price: | $70.90
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| Conversion rate: | 14.1040
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| Call options: | Non-callable until June 1, 2021 then subject to a 130% hurdle
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| Put options: | Upon a fundamental change
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| Pricing date: | May 14
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| Settlement date: | May 17
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| Talk: | Coupon of 0% to 0.5% and an initial conversion premium of 30% to 35%
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| Stock symbol: | NYSE: TWLO
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| Stock price: | $52.52
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| Market capitalization: | $5.03 billion
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