Twitter talks $1.25 billion five-year convertible notes to yield 0%, up 65%-70%

By Abigail W. Adams

Portland, Me., March 1 – Twitter Inc. plans to price $1.25 billion of five-year convertible notes after the market close on Monday with price talk for a fixed coupon of 0% and an initial conversion premium of 65% to 70%, according to a market source.

Goldman Sachs & Co. LLC, Morgan Stanley & Co. LLC and J.P. Morgan Securities LLC are joint bookrunners for the Rule 144A offering, which carries a greenshoe of $187.5 million.

In connection with the offering, the company will enter into convertible note hedge and warrant transactions.

Proceeds will be used to cover the cost of the hedge transactions and cover the amounts due upon the conversion or maturity of the company’s 1% convertible notes due Sept. 15, 2021.

Twitter is a San Francisco-based social networking service.

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