By Rebecca Melvin
New York, Sept. 19 – Etsy Inc. priced $650 million of seven-year convertible notes at par in an overnight deal on Wednesday to yield 0.125% and with an initial conversion premium of 47.5%, according to market sources.
Price talk had been fixed at a 0.125% coupon and a 47.5% premium.
The Rule 144A notes were sold via active bookrunners J.P. Morgan Securities LLC, Goldman Sachs & Co. LLC and Barclays.
The notes are non-callable with no puts. They have standard takeover and dividend protection and will be convertible into cash, shares or a combination of cash and shares at Etsy’s election.
A portion of the net proceeds will be used to pay the cost of capped call transactions that Etsy entered into with one or more of the initial purchasers of the notes. The strike on the capped calls is $148.6250, which represents an initial premium of 150% from the issuer’s perspective.
Etsy also expects to use up to $124.5 million of the proceeds to repurchase shares of its common stock concurrently with the capped call transactions.
Remaining proceeds are for general corporate purposes, which may include stock repurchases, product development, marketing and any potential acquisitions.
Etsy is a New York-based e-commerce website focused on handmade and vintage items.
| Issuer: | Etsy, Inc.
|
| Securities: | Convertible senior notes
|
| Amount: | $650 million
|
| Maturity: | Oct. 1, 2026
|
| Bookrunners: | J.P. Morgan Securities LLC, Goldman Sachs & Co. LLC and Barclays
|
| Coupon: | 0.125%
|
| Price: | Par
|
| Yield: | 0.125%
|
| Conversion premium: | 47.5%
|
| Conversion price: | $87.69
|
| Conversion rate: | 11.4040
|
| Call options: | Non-callable
|
| Put options: | None
|
| Capped call: | Yes, at $148.6250 strike price
|
| Takeover protection: | Yes
|
| Dividend protection: | Yes
|
| Net share settlement: | Yes
|
| Pricing date: | Sept. 18
|
| Settlement date: | Sept. 23
|
| Distribution: | Rule 144A
|
| Talk: | Fixed coupon of 0.125% and fixed initial conversion premium of 47.5%
|
| Stock symbol: | Nasdaq: ETSY
|
| Stock price: | $59.45 at market close Sept. 18
|
| Market capitalization: | $7.22 billion
|
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