Wayfair talks $600 million five-year convertible notes to yield 3.25%-3.75%, up 27.5%-32.5%

By Abigail W. Adams

Portland, Me., Sept. 7 – Wayfair Inc. plans to price $600 million of five-year convertible notes after the market close on Thursday with price talk for a coupon of 3.25% to 3.75% and an initial conversion premium of 27.5% to 32.5%, according to a market source.

Citigroup Global Markets Inc. and Goldman Sachs & Co. LLC are bookrunners for the Rule 144A offering, which carries a greenshoe of $90 million.

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

There is takeover and dividend protection.

In connection with the pricing of the notes, the company will enter into capped call transactions.

Proceeds will be used to fund the call spread and fund the repurchase for cash a portion of its 1.125% convertible notes due 2024 and 0.625% convertible notes due 2025 in privately negotiated transactions.

Wayfair is a Boston-based home decor e-commerce company.

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