Redfin to price $125 million five-year convertible notes to yield 1.75%-2.25%, up 27.5%-32.5%

By Rebecca Melvin

New York, July 16 – Redfin Corp. plans to price $125 million of five-year convertible senior notes and a concurrent offering of 3.5 million shares of common stock. The two offerings are not contingent upon one another, according to a company news release.

Price talk is for a coupon of 1.75% to 2.25% and an initial conversion premium of 27.5% to 32.5%, a market source said. The deal is expected to price after the market close on Wednesday.

Goldman Sachs & Co. LLC, BofA Merrill Lynch and RBC Capital Markets LLC are joint bookrunners of the notes offering, for which there is a greenshoe for up to an additional $18.75 million.

Proceeds are expected to be used for working capital and other general corporate purposes, which may include technology development and marketing activities, general and administrative expenses and capital expenditures. Redfin may also use a portion of proceeds to invest in or acquire third-party businesses, products, services, technologies or other assets.

Seattle-based Redfin is a residential real estate brokerage.

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