Gogo talks $200 million four-year convertible notes to yield 5.5%-6%, up 20%-25%

By Abigail W. Adams

Portland, Me., Nov. 15 – Gogo Inc. plans to price $200 million of four-year convertible notes after the market close on Friday with price talk for a coupon of 5.5% to 6% and an initial conversion premium of 20% to 25%, according to a market source.

J.P. Morgan Securities LLC and Morgan Stanley & Co. LLC are bookrunners for the Rule 144A deal, which carries a greenshoe of $30 million.

The notes are non-callable. They are contingently convertible until Jan. 15, 2022.

The notes will be settled in cash, shares or a combination of both at the company’s option.

Approximately $13 million of the convertible notes will be issued in a private placement to the company’s chief executive officer and financial adviser, J. Wood Capital Advisors LLC, according to a company news release.

Proceeds will be used to repurchase $200 million of the principal amount of the company’s 3.75% convertible notes due 2020 with remaining proceeds to be reserved for interest payments on the new notes.

In connection with the pricing, Gogo may amend the forward stock purchase transactions entered into upon the pricing of its 3.75% notes to extend their maturity.

Gogo is a Chicago-based provider of broadband connectivity products and services for the aviation industry.

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