By Abigail W. Adams
Portland, Me., March 23 – Redfin Corp. priced $500 million of six-year convertible notes after the market close on Monday at par at the cheap end of talk with a coupon of 0.5% and an initial conversion premium of 35%, according to a company news release.
Price talk was for a coupon of 0% to 0.5% and an initial conversion premium of 35% to 40%, according to a market source.
Goldman Sachs & Co. LLC and BofA Securities Inc. were joint bookrunners for the Rule 144A offering, which carries a greenshoe of $75 million.
The notes are non-callable until April 6, 2024 and then subject to a 130% hurdle.
They 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.
In connection with the offering, the company entered into capped call transactions with a cap price of $138.56, which represents a premium of 100% over the last reported sales price of stock.
Net proceeds are expected to be $487.9 million or will be $561.2 million if the greenshoe is exercised in full.
Approximately $54.5 million of the net proceeds will be used to cover the cost of the call spread with the remaining amount to be used for general corporate purposes, which may include investments and acquisitions.
Redfin is a Seattle-based technology-powered real estate company.
| Issuer: | Redfin Corp.
|
| Securities: | Convertible senior notes
|
| Amount: | $500 million
|
| Greenshoe: | $75 million
|
| Maturity: | April 1, 2027
|
| Bookrunners: | Goldman Sachs & Co. LLC and BofA Securities Inc.
|
| Coupon: | 0.5%
|
| Price: | Par
|
| Yield: | 0.5%
|
| Conversion premium: | 35%
|
| Conversion price: | $93.53
|
| Conversion rate: | 10.6920
|
| Call options: | Non-callable until April 6, 2024 and then subject to a 130% hurdle
|
| Put options: | Upon a fundamental change
|
| Pricing date: | March 22
|
| Settlement date: | March 25
|
| Distribution: | Rule 144A
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| Talk: | Coupon of 0% to 0.5% and initial conversion premium of 35% to 40%
|
| Stock symbol: | Nasdaq: RDFN
|
| Stock price: | $69.28 at market close March 22
|
| Market capitalization: | $7.15 billion
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