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Medallia greenshoe lifts five-year convertibles to $575 million
By Wendy Van Sickle
Columbus, Ohio, Sept. 18 – Underwriters for Medallia Inc.’s five-year convertible notes fully exercised their $75 million greenshoe, lifting the total deal size to $575 million, according to an 8-K filing with the Securities and Exchange Commission.
The company priced $500 million of the convertibles after the market close on Tuesday at par with a coupon of 0.125% and an initial conversion premium of 35%, as previously reported.
Pricing came at the rich end of talk for a coupon of 0.125% to 0.625% and at the midpoint of talk for an initial conversion premium of 32.5% to 37.5%.
BofA Securities Inc., Citigroup Global Markets Inc., Wells Fargo Securities LLC and KeyBanc Capital Markets Inc. were joint bookrunners for the Rule 144A offering, which carries a greenshoe of $75 million.
The notes are contingently convertible until June 15, 2025.
They are non-callable until Sept. 20, 2023 and then subject to a 130% hurdle with a make-whole.
The convertibles are putable upon a fundamental change.
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 entered into capped call transactions with a cap price of $58.30, a premium of 100% over the last reported sales price of stock.
Approximately $53.8 million of the proceeds will be used to cover the cost of the call spread with the remaining amount to be used 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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