Twitter talks $1 billion six-year convertible notes to yield 0.125% to 0.625%, up 40% to 45%

By Abigail W. Adams

Portland, Me., June 6 – Twitter, Inc. plans to price $1 billion in six-year convertible notes after the market close on Wednesday with price talk for a coupon of 0.125% to 0.625% and an initial conversion premium of 40% to 45%, according to a market source.

Morgan Stanley & Co. Inc. is the bookrunner for the Rule 144A deal, which carries a greenshoe of $150 million.

The notes are non-callable.

The deal comes with a call spread.

The initial purchasers intend to engage in significant buying and selling activity of Twitter common stock in connection with Twitter’s addition to the S&P 500 index on June 7, according to a news release.

Proceeds will be used to cover the cost of the call spread and for general corporate purposes, which may include the repurchase of the company’s 0.25% convertible notes due 2019 at maturity.

Twitter is a San Francisco-based social networking site.

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