By Abigail W. Adams
Portland, Me., Aug. 18 – Upstart Holdings Inc. priced $575 million 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 42.5%, 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 42.5% to 47.5%, according to a market source.
Goldman Sachs & Co. LLC (lead left) and BofA Securities Inc. were joint bookrunners for the Rule 144A offering, which carries a greenshoe of $86.25 million.
The notes are non-callable until Aug. 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 $400.36, which represents a premium of 100% over the last reported sale price of stock.
Net proceeds are expected to be $561.2 million, assuming no exercise of the greenshoe.
Approximately $50.9 million will be used to cover the cost of the call spread with the remaining amount to be used for general corporate purposes.
Upstart Holdings is a San Mateo, Calif.-based artificial intelligence consumer lending platform.
| Issuer: | Upstart Holdings Inc.
|
| Securities: | Convertible senior notes
|
| Amount: | $575 million
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| Greenshoe: | $86.25 million
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| Maturity: | Aug. 15, 2026
|
| Bookrunners: | Goldman Sachs & Co. LLC (lead left) and BofA Securities Inc.
|
| Coupon: | 0.25%
|
| Price: | Par
|
| Yield: | 0.25%
|
| Conversion premium: | 42.5%
|
| Conversion price: | $285.26
|
| Conversion rate: | 3.5056
|
| 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 42.5% to 47.5%
|
| Stock symbol: | Nasdaq: UPST
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| Stock price: | $200.18 at market close Aug. 17
|
| Market capitalization: | $15.39 billion
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