IAC/InterActive’s $400 million exchangeable notes due 2022 talked at 1%-1.5%, up 27.5%-32.5%

By Stephanie N. Rotondo

Seattle, Sept. 26 – Price talk emerged on IAC/InterActiveCorp.’s planned $400 million offering of exchangeable senior notes due 2022 (expected ratings: Ba2/BB) through its wholly owned subsidiary, IAC FinanceCo Inc.

The deal will have a yield of 1% to 1.5%, a market source reported. The initial conversion premium is expected to be in a range of 27.5% to 32.5%.

The deal was first announced after Monday’s close. Pricing is expected after Tuesday’s close.

J.P. Morgan Securities LLC, Goldman Sachs & Co., BMO Capital Markets, Guggenheim and BofA Merrill Lynch are the bookrunners.

There is a 13-day $60 million over-allotment option on the Rule 144A offering.

In connection with the deal, IAC/InterActive plans to enter into privately negotiated exchangeable note hedge transactions with one or more of the initial purchasers of the notes. The company also expects to enter into warrant transactions with the option counterparties.

Proceeds will be used, in part, to cover the cost of the hedging transactions. The remaining funds will be used for general corporate purposes, including lending to IAC/InterActive, which will then use the funds to repay in full its 4.875% senior notes due 2018.

IAC/InterActive is a New York-based media and internet company.

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