By Abigail W. Adams
Portland, Me., Jan. 18 – Nutanix Inc. priced an upsized $500 million in five-year convertible notes prior to the market open Thursday with a coupon of 0%, at the rich end of talk, and with an initial conversion premium of 33%, richer than talk.
Price talk had been for a coupon of 0% to 0.5% and an initial conversion premium of 25% to 30%, according to a market source.
In connection with the pricing, Nutanix entered into convertible note hedge and warrant transactions with a strike price of $73.46, representing an initial conversion premium of 100% from the company’s perspective.
The notes have a contingent conversion provision. Conversions will be settled in cash, stock or a combination at the company’s option.
Bank of America Merrill Lynch, Goldman Sachs and Morgan Stanley are bookrunners for the Rule 144A deal, which carries an upsized greenshoe of $75 million.
The initial size of the deal had been $400 million with a greenshoe of $60 million.
Net proceeds from the deal are expected to be $489.9 million, assuming the greenshoe is not exercised, according to a company release.
Proceeds will be used to cover the cost of the call spread and for general corporate purposes.
Nutanix is a San Jose, Calif-based cloud computing software company.
| Issuer: | Nutanix Inc.
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| Issue: | Convertible senior notes
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| Amount: | $500 million
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| Greenshoe: | $75 million
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| Maturity: | Jan. 15, 2023
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| Coupon: | 0%
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| Initial conversion premium: | 33%
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| Price: | Par
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| Conversion price: | $48.85
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| Conversion rate: | 20.4705
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| Call: | Non-callable
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| Bookrunners: | Bank of America Merrill Lynch, Goldman Sachs and Morgan Stanley
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| Pricing date: | Jan. 18
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| Settlement: | Jan. 22
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| Distribution: | Rule 144A
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| Stock symbol: | Nasdaq: NTNX
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| Stock price: | $36.73 at close on Jan. 17
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| Market capitalization: | $5.89 billion
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| Price talk: | Coupon of 0% to 0.5%, initial conversion premium of 25% to 30%
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