By Rebecca Melvin
New York, Sept. 12 – Twitter Inc. priced an upsized $1.8 billion of convertible senior notes at par in two equally divided tranches of five-year and seven-year paper, with pricing accomplished at the midpoint of talk, according to a syndicate source.
There is a greenshoe for up to $100 million of additional bonds per tranche, which will boost the total issue size to $2 billion if exercised. The greenshoe was not upsized from initial talk. Initially the base deals were expected to be $650 million each.
Tranche A of five-year notes has a 0.25% coupon, which was the midpoint of 0% to 0.5% coupon talk.
Tranche B of seven-year notes has a 1% coupon, which was the midpoint of 0.75% to 1.25% coupon talk.
Both tranches have a 47.5% initial conversion premium, which was the midpoint of 45% to 50% premium talk.
Joint bookrunners of the Rule 144A deal were Morgan Stanley & Co. LLC, Goldman Sachs & Co. and J.P. Morgan Securities LLC.
The notes are non-callable with no puts.
The deal has a call spread overlay comprised of convertible note hedge and warrant transactions that the company entered into concurrently with the offering, and which boosts the initial conversion premium from the company’s perspective by 100%.
There is contingent conversion if shares exceed 130% of the conversion price and net share settlement.
Proceeds are earmarked for general corporate purposes and also to pay the net cost of a call spread.
Twitter is a San Francisco-based social media website.
| Issuer: | Twitter Inc.
|
| Issue: | Convertible senior unsecured notes
|
| Bookrunners: | Morgan Stanley & Co. LLC, Goldman Sachs & Co., J.P Morgan Securities LLC
|
| Co-managers: | BofA Merrill Lynch, Deutsche Bank Securities Inc.
|
| Amount: | $1.8 billion, upsized from $1.3 billion
|
| Greenshoe: | $200 million
|
| Conversion premium: | 47.5%
|
| Conversion price: | $77.64
|
| Conversion ratio: 12.8793
|
| Dividend protection: | Yes
|
| Takeover protection: | Yes
|
| Call protection: | Non-callable
|
| Puts: | None
|
| Contingent conversion: | Yes, at 130% price hurdle
|
| Net share settlement: | Yes
|
| Call spread: | Yes, strike at $105.28, raises premium to 100% from issuer’s perspective
|
| Pricing date: | Sept. 11
|
| Settlement date: | Sept. 17
|
| Stock reference price: | $52.64, as of close Sept. 11
|
| Distribution: | Rule 144A
|
| Market capitalization: | $31.94 billion
|
|
|
| 2019 notes
|
| Amount: | $900 million, upsized from $650 million
|
| Greenshoe: | $100 million
|
| Maturity: | Sept. 15, 2019
|
| Coupon: | 0.25%
|
| Price: | Par
|
| Yield: | 0.25%
|
| Price talk: | 0%-0.5%, up 45%-50%
|
|
|
| 2021 notes
|
| Amount: | $900 million, upsized from $650 million
|
| Greenshoe: | $100 million
|
| Maturity: | Sept. 15, 2021
|
| Coupon: | 1%
|
| Price: | Par
|
| Yield: | 1%
|
| Price talk: | 0.75%-1.25%, up 45%-50%
|
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