By Abigail W. Adams
Portland, Me., Aug. 12 – Wayfair Inc. priced an upsized $1.32 billion of five-year convertible notes after the market close on Tuesday at par with a coupon of 0.625% and an initial conversion premium of 32.5%, according to a market source.
Pricing came at the rich end of talk for a coupon of 0.625% to 1.125% and at the midpoint of talk for an initial conversion premium of 30% to 35%.
Citigroup Global Markets Inc. and Goldman Sachs & Co. LLC were bookrunners for the Rule 144A offering, which carries an upsized greenshoe of $198 million.
The initial size of the offering was $1.2 billion with a greenshoe of $180 million.
The notes will be contingently convertible until July 1, 2025.
They are non-callable until Oct. 4, 2022 and then subject to a 130% hurdle.
The notes will be settled in cash, shares or a combination of both at the company’s option.
There is dividend and takeover protection.
In connection with the pricing of the notes, the company entered into capped call transactions with a cap price of $787.078, which represents a premium of 150% over the volume-weighted share price on Aug. 11.
The company plans to repurchase $343.4 million of the principal amount of its 0.375% convertible notes due 2022 for $1,040,900,000 in cash in privately negotiated transactions.
Net proceeds are expected to be $1,304,600,000 or will be $1,500,300,000 if the greenshoe is exercised in full.
Approximately $221.8 million will be used to cover the cost of the call spread and $1,040,900,000 will be used to fund the repurchase of the 0.375% convertible notes due 2022. Remaining proceeds will be used for working capital and general corporate purposes.
Wayfair is a Boston-based home decor e-commerce company.
| Issuer: | Wayfair Inc.
|
| Securities: | Convertible senior notes
|
| Amount: | $1.32 billion
|
| Greenshoe: | $198 million
|
| Maturity: | Oct. 1, 2025
|
| Bookrunners: | Citigroup Global Markets Inc. and Goldman Sachs & Co. LLC
|
| Co-managers: | Allen & Co. LLC, Evercore Group LLC and SVB Leerink LLC
|
| Coupon: | 0.625%
|
| Price: | Par
|
| Yield: | 0.625%
|
| Conversion premium: | 32.5%
|
| Conversion price: | $417.15
|
| Conversion rate: | 2.3972
|
| Call options: | Non-callable until Oct. 4, 2022 and then subject to a 130% hurdle
|
| Put options: | Upon a fundamental change
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| Pricing date: | Aug. 11
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| Settlement date: | Aug. 14
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| Talk: | Coupon of 0.625% to 1.125% and initial conversion premium of 30% to 35%
|
| Stock symbol: | NYSE: W
|
| Stock price: | $314.8312 VWAP on Aug. 11
|
| Market capitalization: | $29.49 billion
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