By Abigail W. Adams
Portland, Me., Oct. 16 – Redfin Corp. priced an upsized $575 million of five-year convertible notes after the market close on Thursday at par with a coupon of 0% and an initial conversion premium of 40%, according to a company news release.
Pricing came in line with revised talk for a fixed coupon of 0% and at the rich end of revised talk for an initial conversion premium of 37.5% to 40%, according to a market source.
Initial talk was for a coupon of 0% to 0.5% and an initial conversion premium of 32.5% to 37.5%.
Goldman Sachs & Co. LLC was the bookrunner for the Rule 144A offering, which carries an upsized greenshoe of $86.25.
The initial size of the offering was $525 million with a greenshoe of $78.75 million.
The notes are contingently convertible until July 15, 2025.
The convertibles are non-callable until Oct. 20, 2023 and then subject to a 130% hurdle with a make-whole.
The notes are putable upon a fundamental change. There is dividend protection.
The notes will be settled in cash, shares or a combination of both at the company’s option.
Concurrently with the convertible notes offering, Redfin repurchased $116.9 million of its 1.75% convertible notes due 2023 for $107.4 million in cash and 2.1 million shares of common stock.
Net proceeds are expected to be $562.8 million or will be $647.4 million if the greenshoe is exercised in full.
Proceeds were used to repurchase the 1.75% convertible notes due 2023 in privately negotiated transactions with the remaining amount to be used for general corporate purposes.
Redfin is a Seattle-based residential real estate technology platform.
Issuer: | Redfin Corp.
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Securities: | Convertible senior notes
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Amount: | $575 million
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Greenshoe: | $86.25 million
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Maturity: | Oct. 15, 2025
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Bookrunner: | Goldman Sachs & Co. LLC
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Coupon: | 0%
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Price: | Par
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Yield: | 0%
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Conversion premium: | 40%
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Conversion price: | $72.51
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Conversion rate: | 13.7920
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Call options: | Non-callable until Oct. 20, 2023 and then subject to a 130% hurdle
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Put options: | Upon a fundamental change.
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Pricing date: | Oct. 15
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Settlement date: | Oct. 20
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Distribution: | Rule 144A
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Talk: | Revised talk for coupon of 0% and initial conversion premium of 37.5% to 40%; initial talk for coupon of 0% to 0.5% and premium of 32.5% to 37.5%
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Stock symbol: | Nasdaq: RDFN
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Stock price: | $51.79 at market close Oct. 16
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Market capitalization: | $5.15 billion
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