By Abigail W. Adams
Portland, Me., Feb. 23 – Okta Inc. priced $300 million of five-year convertible notes after the market close on Thursday at par with a coupon of 0.25% and an initial conversion premium of 35%.
Pricing came at the rich end of talk for a coupon of 0.25% to 0.75% and richer than talk for an initial conversion premium of 27.5% to 32.5%.
Goldman Sachs & Co., Morgan Stanley & Co. LLC and J.P. Morgan Securities LLC are joint bookrunners for the Rule 144A deal, which carries a greenshoe of $45 million.
The notes are non-callable.
There is standard dividend and takeover protection. Holders may require Okta to repurchase the notes at par plus accrued interest upon a fundamental change, according to a company news release.
The notes will be settled in cash, shares or a combination of both at the company’s option.
In connection with the pricing, Okta entered into convertible note hedge transactions that will cover the number of shares underlying the convertible notes, according to a company release.
Okta also sold warrants for the purchase of up to the same number of shares of common stock. The warrants have a strike price of $68.06, which represents a premium of 90% from the company’s perspective.
Proceeds are expected to be $290 million if the greenshoe is not exercised. Proceeds will be used to cover the cost of the call spread and for general corporate purposes.
Okta is a San Francisco-based enterprise identity provider. The Okta Identity Cloud connects enterprises with their employees, partners and customers.
| Issuer: | Okta Inc.
|
| Securities: | Convertible senior notes
|
| Amount: | $300 million
|
| Greenshoe: | $45 million
|
| Maturity: | Feb. 15, 2023
|
| Bookrunners: | Goldman Sachs & Co., Morgan Stanley & Co. LLC and J.P. Morgan Securities LLC
|
| Coupon: | 0.25%
|
| Price: | Par
|
| Yield: | 0.25%
|
| Conversion premium: | 35%
|
| Conversion price: | $48.36
|
| Conversion rate: | 20.6795
|
| Call options: | Non-callable
|
| Put options: | Upon a fundamental change
|
| Warrant strike price | $68.06
|
| Pricing date: | Feb. 22
|
| Settlement date: | Feb. 27
|
| Distribution: | Rule 144A
|
| Talk: | Coupon of 0.25% to 0.75% and richer than talk for an initial conversion premium of 27.5% to 32.5%
|
| Stock symbol: | Nasdaq: OKTA
|
| Stock price: | $35.82 at the market close on Feb. 22
|
| Market capitalization: | $3.65 billion
|
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