Redfin greenshoe exercised, lifts 0% convertibles to $661.25 million

By Wendy Van Sickle

Columbus, Ohio, Oct. 20 – Underwriters for Redfin Corp.’s 0% five-year convertible notes fully exercised their $78.75 million greenshoe, increasing the total deal size to $661.25 million, according to an 8-K filing with the Securities and Exchange Commission.

Redfin priced $575 million of the convertibles after the market close on Thursday at par with an initial conversion premium of 40%, as previously reported.

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%.

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.

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 will be $647.4 million with the greenshoe 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.

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