Etsy talks $1 billion seven-year convertibles to yield 0.25%-0.75%, up 42.5%-47.5%

By Abigail W. Adams

Portland, Me., June 7 – Etsy Inc. plans to price $1 billion of seven-year convertible notes after the market close on Tuesday with price talk for a coupon of 0.25% to 0.75% and an initial conversion premium of 42.5% to 47.5%, according to a market source.

Goldman Sachs & Co. LLC (lead left), Citigroup Global Markets Inc and J.P. Morgan Securities LLC are joint bookrunners for the Rule 144A offering, which does not carry a greenshoe.

The notes are non-callable until June 20, 2025 and are then subject to a 130% hurdle.

They are putable upon a fundamental change.

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

In connection with the offering, the company will enter into capped call transactions.

Proceeds will be used to cover the cost of the call spread, to repurchase up to $150 million in common stock concurrently with the pricing of the offering, to repurchase additional shares pursuant to its common stock repurchase program and for general corporate purposes.

Etsy is a Brooklyn, N.Y.-based handmade and vintage item e-commerce company.

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