ServiceNow to price $500 million five-year convertibles to yield 0%-0.5%, up 32.5%-37.5%

By Rebecca Melvin

New York, Nov. 5 - ServiceNow Inc. plans to price $500 million of five-year convertible senior notes after the market close on Wednesday with a 0% to 0.5% coupon and a 32.5% to 37.5% initial conversion premium, according to a syndicate source.

The Rule 144A offering has a $75 million greenshoe.

Underwriters are Morgan Stanley & Co. LLC, J.P. Morgan Securities LLC, BofA Merrill Lynch, RBC Capital Markets and Wells Fargo Securities LLC.

The bonds are non-callable for life with no puts.

Proceeds are earmarked for general corporate purposes, including potential acquisitions and strategic transactions, and to pay the cost of the convertible note hedge transactions.

ServiceNow expects to enter into convertible note hedge and warrant transactions with one or more of the initial purchasers of the notes or their respective affiliates and will use a portion of the net proceeds from the offering to pay for the convertible note hedge transactions.

ServiceNow is a San Diego, Calif.-based cloud-based IT services company.

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