Nashville, Dec. 10 - Serena Software Inc. sold an upsized $190 million of 20-year convertible subordinated notes at par to yield 1.5% with a 32.5% initial conversion premium via joint bookrunners Merrill Lynch & Co. and UBS Investment Bank.
The Rule 144A deal, which was upped from $150 million and also advanced to price one day early, priced at the middle of yield talk of 1.25% to 1.75% and at the aggressive end of premium guidance of 27.5% to 32.5%.
Interest payments for three years, or the first six coupon payments, will be collateralized with U.S. Treasuries.
Holders will have full dividend protection.
The San Mateo, Calif.-based software firm said, after purchasing the U.S. Treasuries and up to 1 million shares of common stock from investors in the notes, it plans to use proceeds for working capital and general corporate purposes, including potential acquisitions or strategic investments. Pending such uses, the company intends to invest the funds in investment-grade securities and interest-bearing money market instruments.
Terms of the deal are:
| Issuer: | Serena Software Inc.
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| Issue: | Convertible subordinated notes
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| Bookrunner: | Merrill Lynch & Co. and UBS Investment Bank
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| Amount: | $190 million, upped from $150 million
|
| Greenshoe: | $30 million, unchanged
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| Maturity: | Dec. 15, 2023
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| Coupon: | 1.5%
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| Price: | Par
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| Yield: | 1.5%
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| Conversion premium: | 32.5%
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| Conversion price: | $22.19
|
| Conversion ratio: | 45.0577
|
| Call: | Non-callable for 3 years, then with 130% trigger for 2 years
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| Put: | In years 5, 10 and 15
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| Price talk: | 1.25-1.75%, up 27.5-32.5%
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| Pricing date: | Dec. 9, after the close
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| Settlement date: | Dec. 15
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| Distribution: | Rule 144A
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