By Stephanie N. Rotondo
Seattle, March 1 – Square Inc. sold $400 million of five-year convertible senior notes at par to yield 0.375% with an initial conversion premium of 32.5% on Wednesday, the company said in a press release.
The deal came at the rich end of the 0.375% to 0.875% yield talk and in the middle of the 30% to 35% premium talk.
The issue was also upsized from $350 million.
Goldman Sachs & Co. LLC and J.P. Morgan Securities LLC are the joint bookrunners on the Rule 144A deal.
There is a $40 million over-allotment option.
Conversions will be settled in cash or class A common shares, or a combination, at the company’s option. The initial conversion rate is 43.5749 shares per each $1,000 of notes, equal to an initial conversion price of $22.95.
The issue will have dividend and takeover protections.
In connection with the offering, Square entered into privately negotiated convertible hedge transactions, as well as into privately negotiated warrant transactions with the hedge counterparties.
The warrant transactions have a strike price of $31.18 per share, an 80% premium over Tuesday’s closing share price.
Proceeds will be used to cover the cost of the hedging transactions, as well as for general corporate purposes.
Square is a San Francisco-based financial services, merchant services aggregator and mobile payment company.
| Issuer: | Square Inc.
|
| Securities: | Convertible senior notes
|
| Amount: | $400 million
|
| Greenshoe: | $40 million
|
| Maturity: | March 1, 2022
|
| Bookrunners: | Goldman Sachs & Co. LLC and J.P. Morgan Securities LLC
|
| Coupon: | 0.375%
|
| Price: | Par of $1,000
|
| Yield: | 0.375%
|
| Conversion premium: | 32.5%
|
| Conversion price: | $22.95
|
| Conversion rate: | 43.5749 shares
|
| Pricing date: | March 1
|
| Settlement date: | March 6
|
| Distribution: | Rule144A
|
| Talk: | 0.375% to 0.875% yield, up 30% to 35%
|
| Stock symbol: | NYSE: SQ
|
| Stock price: | $17.93 as of Feb. 28 close
|
| Market capitalization: | $6.36 billion
|
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