Shift Technologies greenshoe ups 4.75% convertibles to $150 million

By Marisa Wong

Los Angeles, June 2 – The underwriters of Shift Technologies Inc.’s recent offering of 4.75% convertible notes due 2026 exercised their $25 million over-allotment option in full, bringing the total issue size to $150 million, according to an 8-K filing with the Securities and Exchange Commission.

As previously reported, Shift priced an upsized $125 million of the five-year convertible notes after the market close on May 24 at the midpoint of talk with a coupon of 4.75% and an initial conversion premium of 27.5%.

Price talk was for a coupon of 4.5% to 5% and an initial conversion premium of 25% to 30%, according to a market source.

J.P. Morgan Securities LLC and Goldman Sachs & Co. LLC were joint bookrunners for the Rule 144A offering.

The initial size of the offering was $75 million with a greenshoe of $11.25 million.

The notes are callable on or after May 20, 2024 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 entered into capped call transactions with a cap price of $14.8725, which represents a premium of 125% over the last reported sales price of stock.

A portion of the note proceeds were used to cover the cost of the call spread, with the remaining amount to be used for general corporate purposes.

Shift Technologies is a San Francisco-based used car e-commerce platform.

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