ServiceNow greenshoe exercised, lifts convertibles to $782.5 million

By Marisa Wong

Morgantown, W.Va., June 22 – The underwriters of ServiceNow Inc.’s recent offering of 0% five-year convertible senior notes partially exercised their over-allotment option. The company issued an additional $32.5 million of the notes on Thursday, according to an 8-K filing with the Securities and Exchange Commission.

ServiceNow priced $750 million of the convertible notes on May 23 at par with an initial conversion premium of 32.5%, as previously reported.

The Rule 144A deal had a $112.5 million greenshoe.

Morgan Stanley & Co. LLC, J.P. Morgan Securities LLC and RBC Capital Markets LLC were the joint bookrunners.

In connection with the offering, ServiceNow entered into convertible note hedge and warrant transactions, or a call spread, with one or more of the initial purchasers of the notes. The strike price of the warrant transactions is $203.40, which boosts the initial conversion premium from the issuer’s perspective to 100%.

ServiceNow is a Santa Clara, Calif.-based cloud computing company.

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