Gogo plans $300 million five-year convertibles to yield 3.25%-3.75%, up 22.5%-27.5%

By Rebecca Melvin

New York, March 2 – Gogo Inc. plans to price $300 million of five-year convertible senior notes after the market close on Tuesday that were talked to yield 3.25% to 3.75% with an initial conversion premium of 22.5% to 27.5%, according to market sources.

The Rule 144A offering has a $45 million greenshoe and is being sold via bookrunners J.P. Morgan Securities LLC and BofA Merrill Lynch.

The notes are non-callable. They have contingent conversion prior to Dec. 1, 2019 under certain circumstances. They will be settled in shares of common stock, cash or a combination.

The securities have takeover protection.

In connection with the offering of notes, Gogo plans to enter into one or more privately negotiated forward stock purchase transactions with initial purchasers of the notes. The forward stock purchase transactions are expected to facilitate privately negotiated derivative transactions between the forward counterparties and holders of the notes including swaps.

A portion of net proceeds will be used to fund the cost of repurchasing stock pursuant to the forward stock purchase transactions. Remaining proceeds will be used for working capital and other general corporate purposes, including costs associated with developing next generation technology and possibly the acquisition of additional spectrum.

Itasca, Ill.-based Gogo provides in-flight internet connectivity and wireless digital entertainment.

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