Medallia talks $500 million five-year convertible notes to yield 0.125%-0.625%, up 32.5%-37.5%

By Abigail W. Adams

Portland, Me., Sept. 15 – Medallia Inc. plans to price $500 million of five-year convertible notes after the market close on Tuesday with price talk for a coupon of 0.125% to 0.625% and an initial conversion premium of 32.5% to 37.5%, according to a market source.

BofA Securities Inc., Citigroup Global Markets Inc., Wells Fargo Securities LLC and KeyBanc Capital Markets Inc. are joint bookrunners for the Rule 144A offering, which carries a greenshoe of $75 million.

The notes are non-callable for three years and then subject to a 130% hurdle with a make-whole.

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 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 potential acquisitions and strategic transactions.

Medallia is a San Francisco-based customer feedback management software developer.

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