Peloton upsizes five-year convertible notes to $1 billion, tightens talk to yield 0%, up 60%-65%

By Abigail W. Adams

Portland, Me., Feb. 8 – Peloton Interactive Inc. upsized its offering of five-year convertible notes to $1 billion and tightened talk to a fixed coupon of 0% and an initial conversion premium of 60% to 65%, according to a market source.

Initial price talk was for a fixed coupon of 0% and an initial conversion premium of 55% to 60%, according to a market source.

J.P. Morgan Securities LLC (lead left) and Goldman Sachs & Co. LLC are bookrunners for the Rule 144A offering, which carries an upsized greenshoe of $150 million.

The initial size of the offering was $600 million with a greenshoe of $90 million.

The notes are non-callable for three years and then subject to a 130% hurdle. There is takeover and dividend protection.

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

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 and for general corporate purposes, which may include capital expenditures for the construction or expansion of facilities and acquisitions or investments.

Peloton is a New York-based exercise and media company.

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