By Abigail W. Adams
Portland, Me., July 22 – LendingTree Inc. priced $500 million of five-year convertible notes after the market close on Tuesday at par at the midpoint of talk with a coupon of 0.5% and an initial conversion premium of 30%, according to a company news release.
Price talk was for a coupon of 0.25% to 0.75% and an initial conversion premium of 27.5% to 32.5%, according to a market source.
BofA Securities Inc., Goldman Sachs & Co. LLC and SunTrust Robinson Humphrey Inc. were joint bookrunners for the Rule 144A deal, which carries a greenshoe of $75 million.
The notes are contingently convertible until March 13, 2025.
The convertibles are non-callable until July 20, 2023 and then subject to a 130% hurdle with a make-whole.
The notes will be settled in cash, shares or a combination of both at the company’s option.
In connection with the pricing of the notes, the company entered into convertible note hedge and warrant transactions.
The strike price on the warrant transactions is $709.52, which represents a premium of 100% over the last reported sales price of stock.
Net proceeds are expected to be $486.6 million.
Approximately $54.8 million of proceeds will be used to cover the cost of the hedge transactions and $234 million will be used to repurchase $130.3 million of the company’s outstanding 0.625% convertible notes due 2022 in privately negotiated transactions, according to the news release.
Remaining proceeds to be used for general corporate purposes, which may include potential acquisitions.
LendingTree is a Charlotte, N.C.-based online loan marketplace.
| Issuer: | LendingTree Inc.
|
| Securities: | Convertible senior notes
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| Amount: | $500 million
|
| Greenshoe: | $75 million
|
| Maturity: | July 15, 2025
|
| Bookrunners: | BofA Securities Inc., Goldman Sachs & Co. LLC and SunTrust Robinson Humphrey Inc.
|
| Coupon: | 0.5%
|
| Price: | Par
|
| Yield: | 0.5%
|
| Conversion premium: | 30%
|
| Conversion price: | $461.19
|
| Conversion rate: | 2.1683
|
| Call options: | Non-callable until July 20, 2023 and then subject to a 130% hurdle
|
| Put options: | None
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| Pricing date: | July 21
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| Settlement date: | July 24
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| Distribution: | Rule 144A
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| Talk: | Coupon of 0.25% to 0.75% and initial conversion premium of 27.5% to 32.5%
|
| Stock symbol: | Nasdaq: TREE
|
| Stock price: | $354.76 at market close July 21
|
| Market capitalization: | $4.63 billion
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