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Snap greenshoe exercised, raises 0.25% convertibles to $1 billion
By Wendy Van Sickle
Columbus, Ohio, April 28 – Underwriters for Snap Inc.’s 0.25% five-year convertible notes fully exercised their $150 million greenshoe, lifting the total deal size to $1 billion, according to an 8-K filing with the Securities and Exchange Commission.
The company priced $850 million of the convertibles after the market close on Thursday at par with an initial conversion premium of 35%, as previously reported.
Pricing came at the rich end of talk for a yield of 0.25% to 0.75% and at the midpoint of talk for an initial conversion premium of 32.5% to 37.5%.
Goldman Sachs & Co. LLC, J.P. Morgan Securities LLC and Morgan Stanley & Co. LLC were joint 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 May 6, 2023 and then subject to a 130% hurdle with a make-whole.
They are contingently convertible until Feb. 1, 2025.
The notes are putable upon a fundamental change. There is standard dividend protection.
The notes will be settled in cash, shares or a combination of both at the company’s option.
In connection with the pricing of the notes, Snap entered into capped call transactions with a cap price of $32.12 per share, representing a 100% premium over the last reported sales price of stock.
Net proceeds are expected to be $840.1 million or $988.5 million if the greenshoe is exercised in full.
Approximately $85 million of proceeds will be used to cover the cost of the call spread with the remaining amount to be used for general corporate purposes.
Snap is a Santa Monica, Calif.-based camera and social media company.
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