SmileDirectClub ups convertible offering to $650 million, tightens talk to 0% coupon, up 35%-40%

By Abigail W. Adams

Portland, Me., Feb. 4 – SmileDirectClub Inc. upsized its offering of five-year convertible notes to $650 million from $350 million and tightened talk to a fixed coupon of 0% and an initial conversion premium of 35% to 40%, according to a market source.

Initial price talk was 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 an upsized greenshoe of $97.5 million.

The initial size of the greenshoe was $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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