By Abigail W. Adams
Portland, Me., May 25 – Shift Technologies Inc. priced an upsized $125 million of five-year convertible notes after the market close on Monday at the midpoint of talk with a coupon of 4.75% and an initial conversion premium of 27.5%, according to a company news release.
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, which carries an upsized greenshoe of $25 million.
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.
Net proceeds are expected to be $119.7 million assuming no exercise of the greenshoe.
Approximately $23.6 million will be 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.
| Issuer: | Shift Technologies Inc.
|
| Securities: | Convertible senior notes
|
| Amount: | $125 million
|
| Greenshoe: | $25 million
|
| Maturity: | May 15, 2026
|
| Bookrunners: | J.P. Morgan Securities LLC and Goldman Sachs & Co. LLC
|
| Coupon: | 4.75%
|
| Price: | Par
|
| Yield: | 4.75%
|
| Conversion premium: | 27.5%
|
| Conversion price: | $8.43
|
| Conversion rate: | 118.6556
|
| Call options: | Callable on or after May 20, 2024 subject to a 130% hurdle
|
| Put options: | Upon a fundamental change
|
| Pricing date: | May 24
|
| Settlement date: | May 27
|
| Distribution: | Rule 144A
|
| Talk: | Coupon of 4.5% to 5% and initial conversion premium of 25% to 30%
|
| Stock symbol: | Nasdaq: SFT
|
| Stock price: | $6.61 at market close May 25
|
| Market capitalization: | $556.19 million
|
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