i3 Verticals greenshoe lifts five-year exchangeables to $138 million

Chicago, Feb. 18 – Initial purchasers for i3 Verticals LLC’s upsized $120 million five-year exchangeable notes have fully exercised their option to purchase an additional $18 million of the notes.

The total issue size of the offering is now $138 million.

As previously reported, the issuer originally sold the convertibles at par with a coupon of 1% and an initial exchange premium of 30%.

Price talk was for a coupon of 0.75% to 1.25% and an initial exchange premium of 27.5% to 32.5%, according to a market source.

The notes are exchangeable for i3 Verticals Inc. common shares.

BofA Securities Inc. was the bookrunner for the Rule 144A offering.

The initial size of the deal was $100 million with a greenshoe of $15 million.

The notes are non-callable until Feb. 20, 2023 and then subject to a 130% hurdle.

They are contingently convertible until Aug. 15, 2024.

They are putable upon a fundamental change. There is dividend protection.

The notes will be settled in cash, shares or a combination of both at the company’s option.

In connection with the pricing of the notes, the issuer and company will amend their credit agreement to decrease the amount in the revolving credit facility to $275 million, change certain financial covenants and change the permitted use of proceeds.

The issuer also entered into convertible note hedge transactions.

Proceeds will be used to cover the cost of the hedges and pay down outstanding borrowings under its senior secured credit facility.

i3 Verticals is a Nashville, Tenn.-based technology and payment processing software company.

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