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Momo greenshoe exercised in part, lifts convertibles to $725 million
By Devika Patel
Knoxville, Tenn., Aug. 22 – Momo Inc. reported in a conference call that the $100 million greenshoe for its $650 million sale of seven-year convertible notes was exercised in part for $75 million, lifting the total deal size to $725 million.
“On June 27, 2018, we announced the issuance of $650 million convertible bonds,” chief financial officer Jonathan Xiaosong Zhang said on the company’s second quarter ended June 30 earnings conference call on Wednesday.
“The transaction was closed on July 2, 2018 and an additional $75 million of convertible bond was issued upon exercise of the greenshoe element on July 30,” Zhang said.
As of June 30, Momo’s cash, cash equivalents, term deposits and restricted cash totaled $1,079,800,000, compared to $1,059,600,000 as of Dec. 31, 2017.
On June 27, Momo priced $650 million of seven-year convertible notes at the mid-point of talk with a coupon of 1.25% and an initial conversion premium of 42.5%.
Price talk had been for a coupon of 1% to 1.5% and an initial conversion premium of 40% to 45%.
J.P. Morgan Securities LLC was lead left bookrunner for the Rule 144A and Regulation S deal.
Credit Suisse Securities LLC and Morgan Stanley & Co. Inc. were also bookrunners.
The notes are non-callable. There is a put option on July 1, 2023 or in the event of a fundamental change.
Proceeds will be used to repay the $300 million bank loan facility entered into to finance the acquisition of Tantan Ltd., pay the remaining amount for the acquisition and invest in Tantan’s business development and other business development initiatives in Momo’s platform.
Momo is a Beijing-based mobile social networking platform in China.
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