By Abigail W. Adams
Portland, Me., June 7 – Avaya Holdings Corp. priced $300 million of five-year convertible notes after the market close on Wednesday at the mid-point of talk with a coupon of 2.25% and an initial conversion premium of 30%, according to a company news release.
Price talk was for a coupon of 2% to 2.5% and an initial conversion premium of 27.5% to 32.5%, according to a market source.
J.P. Morgan Securities LLC, Barclays Capital Inc., Citigroup Global Markets Inc., Credit Suisse Securities LLC and Goldman Sachs & Co. are joint bookrunners for the Rule 144A deal, which carries a greenshoe of $50 million.
The notes are non-callable. There is dividend and takeover protection.
In connection with the offering, Avaya entered into convertible note hedge transactions with Barclays Bank plc, Credit Suisse and JP Morgan.
The company also entered into warrant transactions with the options counterparties with a strike price of $37.36, which is a 75% premium over the closing price of Avaya stock on the date of pricing.
Approximately $22.4 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.
Avaya is a Santa Clara, Calif.-based provider of digital communications software, services and devices.
| Issuer: | Avaya Holdings Corp.
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| Securities: | Convertible senior notes
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| Amount: | $300 million
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| Greenshoe: | $50 million
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| Maturity: | June 15, 2023
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| Bookrunners: | J.P. Morgan Securities LLC, Barclays Capital Inc., Citigroup Global Markets Inc., Credit Suisse Securities LLC and Goldman Sachs & Co.
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| Coupon: | 2.25%
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| Price: | Par
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| Conversion premium: | 30%
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| Conversion price: | $27.76
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| Conversion rate: | 36.0295
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| Call options: | None
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| Put options: | None
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| Pricing date: | June 6
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| Settlement date: | June 11
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| Talk: | Coupon of 2% to 2.5% and an initial conversion premium of 27.5% to 32.5%
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| Stock symbol: | NYSE: AVYA
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| Stock price: | $21.35
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| Market capitalization: | $2.4 billion
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