By Abigail W. Adams
Portland, Me., July 19 – Redfin Corp. priced $125 million of five-year convertible notes after the market close on Wednesday at par with a coupon of 1.75% and an initial conversion premium of 30%, according to a company news release.
Pricing came at the rich end of talk for a coupon of 1.75% to 2.25% and at the midpoint of talk for an initial conversion premium of 27.5% to 32.5%, according to a market source.
Goldman Sachs & Co. LLC, BofA Merrill Lynch and RBC Capital Markets LLC are joint bookrunners for the registered offering, which carries a greenshoe of $18.75 million.
The convertible notes were priced concurrently with a common stock offering of 4,205,510 shares, which priced at $23.50 per share. The stock sale carries a greenshoe of 630,826 shares.
The convertible notes are non-callable until July 20, 2021 and then may be redeemed subject to a 130% hurdle. Holders may require the company to repurchase the notes upon a fundamental change.
The notes are subject to contingent conversion until April 15, 2023.
Net proceeds from the convertible notes offering are expected to be $120.8 million, or $139 million if the greenshoe is exercised in full.
Proceeds from the combined offerings are expected to be $223.8 million, or $257.4 million if the greenshoes are exercised in full.
Proceeds will 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 technology-based residential real estate brokerage.
| Issuer: | Redfin Corp.
|
| Securities: | Convertible senior notes
|
| Amount: | $125 million
|
| Greenshoe: | $18.75 million
|
| Maturity: | July 15, 2023
|
| Bookrunners: | Goldman Sachs & Co. LLC, BofA Merrill Lynch and RBC Capital Markets LLC
|
| Coupon: | 1.75%
|
| Price: | Par
|
| Yield: | 1.75%
|
| Conversion premium: | 30%
|
| Conversion price: | $30.55
|
| Conversion rate: | 32.7332
|
| Call options: | Non-callable until July 20, 2021 then subject to a 130% hurdle
|
| Put options: | Upon a fundamental change
|
| Pricing date: | July 18
|
| Settlement date: | July 23
|
| Talk: | Coupon of 1.75% to 2.25% and an initial conversion premium of 27.5% to 32.5%
|
| Stock symbol: | Nasdaq: RDFN
|
| Stock price: | $23.50 in concurrent offering
|
| Market capitalization: | $1.94 billion
|
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