By Abigail W. Adams
Portland, Me., March 27 – iQIYI Inc. priced $1.05 billion of six-year convertible notes after the market close on Tuesday at par with a coupon of 2% and an initial conversion premium of 32.5%, according to a company news release.
Pricing came at the rich end of talk for 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 were 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.
The notes are contingently convertible until Oct. 1, 2024.
In connection with the offering, the company entered into capped call transactions with a cap price of $40.02, which represents a premium of 75% from the last reported sales price of the company’s American Depositary Shares.
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.
| Issuer: | iQIYI Inc.
|
| Securities: | Convertible senior notes
|
| Amount: | $1.05 billion
|
| Greenshoe: | $150 million
|
| Maturity: | April 1, 2025
|
| Bookrunners: | Goldman Sachs & Co. LLC, BofA Merrill Lynch and J.P. Morgan Securities LLC
|
| Coupon: | 2%
|
| Price: | Par
|
| Yield: | 2%
|
| Conversion premium: | 32.5%
|
| Conversion price: | $30.30
|
| Conversion rate: | 33.0003
|
| Call options: | Non-callable
|
| Put options: | April 1, 2023
|
| Pricing date: | March 26
|
| Settlement date: | March 29
|
| Distribution: | Rule 144A and Regulation S
|
| Talk: | Coupon of 2% to 2.5% and an initial conversion premium of 27.5% to 32.5%
|
| Stock symbol: | Nasdaq: IQ
|
| Stock price: | $22.87 at market close March 26
|
| Market capitalization: | $16.27 billion
|
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