By Abigail W. Adams
Portland, Me., June 11 – The RealReal Inc. priced an upsized $150 million of five-year convertible notes after the market close on Wednesday at par at the midpoint of talk with a coupon of 3% and an initial conversion premium of 27.5%, according to a company news release.
Price talk was for a coupon of 2.75% to 3.25% and an initial conversion premium of 25% to 30%, according to a market source.
Morgan Stanley & Co. LLC was lead left bookrunner for the Rule 144A offering, which carries an upsized greenshoe of $22.5 million.
The initial size of the offering was $125 million with a greenshoe of $18.75 million.
The notes are contingently convertible until March 15, 2025.
They are non-callable until June 20, 2023 and then subject to a 130% hurdle.
The notes are putable upon a fundamental change.
They 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 company entered into capped call transactions with a cap price of $27.88, which represents a 100% premium over the last reported sales price of stock.
Net proceeds are expected to be $144.1 million or will be $165.8 million if the greenshoe is exercised in full.
Proceeds will be used to cover the cost of the call spread, for working capital and for general corporate purposes, which may include acquisitions or strategic investments.
The RealReal is a San Francisco-based luxury goods e-commerce company.
| Issuer: | The RealReal Inc.
|
| Securities: | Convertible senior notes
|
| Amount: | $150 million
|
| Greenshoe: | $22.5 million
|
| Maturity: | June 15, 2025
|
| Bookrunner: | Morgan Stanley & Co. LLC
|
| Coupon: | 3%
|
| Price: | Par
|
| Yield: | 3%
|
| Conversion premium: | 27.5%
|
| Conversion price: | $17.77
|
| Conversion rate: | 56.2635
|
| Call options: | Non-callable until June 20, 2023 and then subject to a 130% hurdle
|
| Put options: | Upon a fundamental change
|
| Pricing date: | June 10
|
| Settlement date: | June 15
|
| Distribution: | Rule 144A
|
| Talk: | Coupon of 2.75% to 3.25% and initial conversion premium of 25% to 30%
|
| Stock symbol: | Nasdaq: REAL
|
| Stock price: | $13.94 at market close June 10
|
| Market capitalization: | $1.21 billion
|
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