Nutanix greenshoe increases 0% five-year convertibles to $575 million

By Wendy Van Sickle

Columbus, Ohio, Jan. 23 – The initial purchasers for Nutanix Inc.’s 0% convertible notes due Jan. 15, 2023 fully exercised their $75 million over-allotment option on Thursday, bringing the total deal size to $575 million, according to an 8-K filing with the Securities and Exchange Commission.

As previously reported, Nutanix priced an upsized $500 million of the convertible notes prior to the market open Thursday with the 0% coupon, 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.

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.

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