By Abigail W. Adams
Portland, Me., Aug. 18 – Opendoor Technologies Inc. priced an upsized $850 million offering of five-year convertible notes after the market close on Tuesday at par with a coupon of 0.25% and an initial conversion premium of 30%, according to a company news release.
Pricing came at the midpoint of talk for a coupon of 0% to 0.5% and at the cheap end of talk for an initial conversion premium of 30% to 35%, according to a market source.
Citigroup Global Markets Inc. (lead left) and Morgan Stanley & Co. LLC were bookrunners for the Rule 144A offering, which carries an upsized greenshoe of $127.5 million.
The initial size of the offering was $750 million with a greenshoe of $112.5 million.
The notes are non-callable until Aug. 20, 2024 and then subject to a 130% hurdle.
They are putable upon a fundamental change.
The notes will be settled in cash up to the principal amount with any remainder to be settled in cash, shares or a combination of both at the company’s option.
In connection with the offering, the company plans to enter into capped call transactions with a cap price of $29.59, which represents a premium of 100% over the last reported sales price of stock.
Net proceeds are expected to be $827.9 million or will be $952.2 million if the greenshoe is exercised in full.
Approximately $103.3 million will be used to cover the cost of the call spread with the remainder to be used for general corporate purposes.
Opendoor is a San Francisco-based online residential real estate company.
| Issuer: | Opendoor Technologies Inc.
|
| Securities: | Convertible senior notes
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| Amount: | $850 million
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| Greenshoe: | $127.5 million
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| Maturity: | Aug. 15, 2026
|
| Bookrunners: | Citigroup Global Markets Inc. (lead left) and Morgan Stanley & Co. LLC
|
| Coupon: | 0.25%
|
| Price: | Par
|
| Yield: | 0.25%
|
| Conversion premium: | 30%
|
| Conversion price: | $19.23
|
| Conversion rate: | 51.9926
|
| Call options: | Non-callable until Aug. 20, 2024 and then subject to a 130% hurdle
|
| Put options: | Upon a fundamental change
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| Pricing date: | Aug. 17
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| Settlement date: | Aug. 20
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| Distribution: | Rule 144A
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| Talk: | Coupon of 0% to 0.5% and initial conversion premium of 30% to 35%
|
| Stock symbol: | Nasdaq: OPEN
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| Stock price: | $14.795 at market close Aug. 18
|
| Market capitalization: | $8.95 billion
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