By Rebecca Melvin
New York, Sept. 5 – Zillow Group Inc. priced an upsized $1.1 billion of convertible senior notes in two tranches due in 2024 and 2026, according to a company news release on Thursday.
A $600 million tranche of 0.75% five-year notes priced at the midpoint of 0.5% to 1% coupon talk. The aggregate principal amount of the offering was increased from the previously announced $500 million size.
A $500 million tranche of 1.375% seven-year notes priced toward the cheap end of 1% to 1.5% coupon talk.
Both tranches priced at an initial conversion premium of 35%, which was the cheap end of 35% to 40% talk for the premium.
The 2024 tranche has a $90 million greenshoe, which was upsized from $75 million. The notes are non-callable until Sept. 5, 2022 and then provisionally callable at a 130% price hurdle.
The 2026 notes have a $75 million greenshoe, and the notes are non-callable until Sept. 5, 2023 and then provisionally callable at a 130% price hurdle.
Morgan Stanley & Co. LLC and J.P. Morgan Securities LLC are bookrunners for the Rule 144A deals, which have takeover protection.
Zillow intends to use about $75.2 million of proceeds from the 2024 notes and $75.4 million of proceeds from the 2026 notes to pay the cost of the capped call transactions, with the remainder of proceeds earmarked for general corporate purposes, including working capital, sales and marketing activities, general and administrative matters and capital expenditures.
Additionally, Zillow may choose to expand its current business through acquisitions of, or investments in, other businesses, products or technologies, using cash or shares of common stock or capital stock. However, the company has no definitive agreements or commitments with respect to acquisitions or investments at this time.
Seattle-based Zillow is an online real estate database company.
| Issuer: | Zillow Group Inc.
|
| Securities: | Convertible senior notes
|
| Amount: | $1.1 billion, upsized from $1 billion
|
| Greenshoe: | $165 million
|
| Bookrunners: | Morgan Stanley & Co. LLC and J.P. Morgan Securities LLC
|
| Conversion premium: | 35%
|
| Conversion price: | $43.51
|
| Conversion rate: | 22.9839
|
| Pricing date: | Sept. 5
|
| Settlement date: | Sept. 9
|
| Distribution: | Rule 144A
|
| Takeover protection: | Yes
|
| Capped call: | Yes
|
| Stock symbol: | Nasdaq: Z
|
| Stock reference price: | $32.23, as of close on Sept. 4
|
| Market capitalization: | $6.67 billion
|
|
|
| 2024 notes
|
| Amount: | $600 million, upsized from $500 million
|
| Greenshoe: | $90 million, upsized from $75 million
|
| Maturity: | Sept. 1, 2024
|
| Coupon: | 0.75%
|
| Price talk: | 0.5%-1.0%, up 35%-40%
|
| Call options: | Non-callable until Sept. 5, 2022, then subject to a 130% hurdle
|
|
|
| 2026 notes
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| Amount: | $500 million
|
| Greenshoe: | $75 million
|
| Maturity: | Sept. 1, 2026
|
| Coupon: | 1.375%
|
| Price talk: | 1%-1.5%, up 35%-40%
|
| Call options: | Non-callable until Sept. 5, 2023, then subject to a 130% hurdle
|
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