By Wendy Van Sickle
Columbus, Ohio, Feb. 8 – Peloton Interactive Inc. priced an $875 million offering of 0% five year convertible notes on Monday with a 65% initial conversion premium, according to a news release.
The company announced an initial planned deal size of $600 million before announcing plans for an upsize to $1 billion and finally settling on $875 million.
Earlier on Monday, Peloton tightened talk to a fixed coupon of 0% and an initial conversion premium of 60% to 65%.
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 $125 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.
| Issuer: | Peloton Interactive Inc.
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| Securities: | Convertible senior notes
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| Amount: | $875 million
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| Greenshoe: | $125 million
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| Maturity: | Feb. 15, 2026
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| Bookrunners: | J.P. Morgan Securities LLC (lead left) and Goldman Sachs & Co. LLC
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| Coupon: | 0%
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| Conversion premium: | 65%
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| Conversion price: | $239.23
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| Conversion rate: | 4.18
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| Call options: | Non-callable for three years and then subject to a 130% hurdle
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| Put options: | Upon a fundamental change
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| Pricing date: | Feb. 8
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| Settlement date: | Feb. 11
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| Distribution: | Rule 144A
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| Talk: | Revised talk for fixed coupon of 0% and initial conversion premium of 60% to 65%; initial price talk was for coupon of 0% and initial conversion premium of 55% to 60%
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| Stock symbol: | Nasdaq: PTON
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| Stock price: | $144.99 at market close Feb. 8
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| Market capitalization: | $42.41 billion
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