By Abigail W. Adams
Portland, Me., Jan. 14 – Virgin Galactic Holdings Inc. priced $425 million of five-year convertible notes after the market close on Thursday at par at the cheap end of talk with a coupon of 2.5% and an initial conversion premium of 27.5%, according to a company news release.
Price talk was for a coupon of 2% to 2.5% and an initial conversion premium of 27.5% to 32.5%, according to a market source.
Credit Suisse Securities (USA) LLC is the active bookrunner for the Rule 144A offering, which carries a greenshoe of $75 million.
Goldman Sachs & Co. LLC and Morgan Stanley & Co. LLC are passive bookrunners.
The notes are non-callable until Feb. 6, 2025 and then are subject to a 130% hurdle.
They 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 offering, the company will enter into capped call transactions with a cap price of $20.06, which represents a premium of 100% over the last reported sales price of stock.
Net proceeds from the offering are expected to be $413.7 million or will be $486.8 million if the greenshoe is exercised in full.
Approximately $52.3 million of net proceeds will be used to fund the cost of the call spread. Remaining proceeds will be used for capital expenditures to fund the development of the company’s spacecraft fleet for high-volume commercial services and for other general corporate purposes.
Virgin Galactic is a Las Cruces, N.M.-based aerospace and space travel company.
| Issuer: | Virgin Galactic Holdings Inc.
|
| Amount: | $425 million
|
| Greenshoe: | $75 million
|
| Issue: | Convertible senior notes
|
| Maturity: | Feb. 1, 2027
|
| Active Bookrunner: | Credit Suisse Securities (USA) LLC
|
| Passive Bookrunner: | Goldman Sachs & Co. LLC and Morgan Stanley & Co. LLC
|
| Coupon: | 2.5%
|
| Price: | Par
|
| Yield: | 2.5%
|
| Conversion premium: | 27.5%
|
| Conversion price: | $12.79
|
| Conversion rate: | 78.1968
|
| Call options: | Non-callable until Feb. 6, 2025 and then are subject to a 130% hurdle
|
| Put options: | Upon a fundamental change
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| Pricing date: | Jan. 13
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| Settlement date: | Jan. 19
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| Distribution: | Rule 144A
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| Talk: | Coupon of 2% to 2.5% and initial conversion premium of 27.5% to 32.5%
|
| Stock symbol: | NYSE: SPCE
|
| Stock price: | $10.03 at market close Jan. 13
|
| Market capitalization: | $2.59 billion
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