iQIYI greenshoe lifts 2% convertibles due 2025 to $1.2 billion

By Wendy Van Sickle

Columbus, Ohio, March 29 – Underwriters for iQIYI Inc.’s 2% convertible notes due April 1, 2025 fully exercised their $150 million greenshoe, lifting the total deal size to $1.2 billion, according to a news release.

The company priced $1.05 billion of the convertibles after the market close on Tuesday at par with an initial conversion premium of 32.5%, as previously reported.

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%.

Goldman Sachs & Co. LLC, BofA Merrill Lynch and J.P. Morgan Securities LLC were the bookrunners for the Rule 144A and Regulation S offering.

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.

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