iQIYI talks $1.05 billion six-year convertibles to yield 2%-2.5%, up 27.5%-32.5%

By Abigail W. Adams

Portland, Me., March 25 – iQIYI Inc. plans to price $1.05 billion of six-year convertible notes after the market close on Tuesday with a coupon of 2% to 2.5% and an initial conversion premium of 27.5% to 32.5%, according to a market source.

Goldman Sachs & Co. LLC, BofA Merrill Lynch and J.P. Morgan Securities LLC are the bookrunners for the Rule 144A and Regulation S offering, which carries a greenshoe of $150 million.

The notes are non-callable. They are putable on April 1, 2023.

They are contingently convertible until Oct. 1, 2024.

In connection with the offering, the company will enter into capped call transactions.

Proceeds will be used to cover the cost of the call spread, to expand its content offerings, to strengthen its technologies, for working capital and for general corporate purposes.

iQIYI is a Beijing-based online entertainment service provider.

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