Magnite greenshoe lifts 0.25% convertibles due 2026 to $400 million

By Marisa Wong

Los Angeles, March 19 – The underwriters of Magnite’s offering of 0.25% convertible notes due 2026 exercised their $50 million over-allotment option in full, bringing the total issue size to $400 million, according to a news release.

Magnite priced $350 million of the five-year convertible notes after the market close on March 15 at par at the midpoint of talk with a coupon of 0.25% and an initial conversion premium of 40%, as previously reported.

Price talk was for a coupon of 0% to 0.5% and an initial conversion premium of 37.5% to 42.5%, according to a market source.

Goldman Sachs & Co. LLC was the underwriter for the Rule 144A and Regulation S offering.

The notes are non-callable until March 20, 2024 and then subject to a 130% hurdle.

They are putable upon a fundamental change.

In connection with the offering, the company entered into capped call transactions with a cap price of $91.26, which represents a premium of 100% over the last reported sales price of stock.

About $34.1 million of net proceeds will be used to cover the cost of the call spread with remaining proceeds to be used to pay a portion of the purchase price for the acquisition of SpotX.

If the acquisition is not completed, proceeds will be used for general corporate purposes, which may include capital expenditures or acquisitions and strategic transactions.

Magnite is a Los Angeles-based sellside advertising platform.

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