Upstart greenshoe lifts 0.25% convertible notes to $661.25 million

By Devika Patel

Knoxville, Tenn., Aug. 20 – Underwriters for Upstart Holdings Inc.’s 0.25% five-year convertible notes exercised their over-allotment option in full for $86.25 million more of the convertibles, increasing the size of the issue to $661.25 million, the company said in an 8-K filed with the Securities and Exchange Commission.

As previously reported, the company sold the convertibles at par on Aug. 17.

The convertibles have an initial conversion premium of 42.5% and an initial conversion price of $285.26, which equals a conversion rate of 3.5056.

Goldman Sachs & Co. LLC (lead left) and BofA Securities Inc. were joint bookrunners for the Rule 144A offering.

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.

Approximately $50.9 million of the net proceeds 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.

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