SmileDirectClub talks $350 million five-year convertible notes to yield 0%-0.5%, up 30%-35%

By Abigail W. Adams

Portland, Me., Feb. 4 – SmileDirectClub Inc. plans to price $350 million of five-year convertible notes after the market close on Thursday with price talk for a coupon of 0% to 0.5% and an initial conversion premium of 30% to 35%, according to a market source.

J.P. Morgan Securities LLC and Citigroup Global Markets Inc. are joint bookrunners for the Rule 144A offering, which carries a greenshoe of $52.5 million.

The notes are non-callable until Feb. 6, 2024 and then subject to a 130% hurdle.

There is takeover and dividend protection.

In connection with the offering, 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 repaying outstanding amounts under its credit facilities.

SmileDirectClub is a Nashville, Tenn.-based oral care company.

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