By Abigail W. Adams
Portland, Me., May 23 – Square Inc. priced $750 million of five-year convertible notes after the market close on Tuesday at the cheap end of talk with a coupon of 0.5% and an initial conversion premium of 42.5%, according to a company news release.
Price talk had been for a coupon of 0% to 0.5% and an initial conversion premium of 42.5% to 47.5%, according to a market source.
Goldman Sachs & Co. is the sole bookrunner for the Rule 144A offering, which carries a greenshoe of $112.5 million.
The notes are contingently convertible until Feb. 15, 2023.
The notes are non-callable and have no investor puts.
Conversions may be settled in cash, shares or a combination of both at the company’s option.
In connection with the pricing, Square will enter into convertible note hedge and warrant transactions.
The strike price on the warrant transactions is $109.26, which represents a premium of 100% over the last reported sales price of stock, according to a company news release.
Approximately $52.6 million of the proceeds will cover the cost of the call spread. Remaining proceeds will be used for general corporate purposes.
Square is a San Francisco-based mobile payment company.
| Issuer: | Square Inc.
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| Securities: | Convertible senior notes
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| Amount: | $750 million
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| Greenshoe: | $112.5 million
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| Maturity: | May 15, 2023
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| Bookrunners: | Goldman Sachs & Co.
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| Coupon: | 0.5%
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| Price: | Par
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| Conversion premium: | 42.5%
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| Conversion price: | $77.85
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| Conversion rate: | 12.8456
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| Call options: | None
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| Put options: | None
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| Contingent conversion: | Until Feb. 15, 2023
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| Pricing date: | May 22
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| Settlement date: | May 25
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| Talk: | Coupon of 0% to 0.5% and an initial conversion premium of 42.5% to 47.5%
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| Stock symbol: | NYSE: SQ
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| Stock price: | $54.63 at market close May 22
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| Market capitalization: | $21.37 billion
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