Twilio greenshoe lifts 0.25% convertibles due 2023 to $550 million

By Marisa Wong

Morgantown, W.Va., May 18 – The initial purchasers of Twilio Inc.’s offering of 0.25% convertible senior notes due 2023 exercised in full their $75 million over-allotment option, bringing the total issue amount of the notes to $550 million, according to an 8-K filing with the Securities and Exchange Commission.

Twilio priced an upsized $475 million of five-year convertible notes after the market close on May 14 with a coupon of 0.25% and an initial conversion premium of 35%, as previously announced.

The greenshoe was exercised on Wednesday.

Pricing came at the midpoint of talk for a coupon of 0% to 0.5% and at the rich end of talk for an initial conversion premium of 30% to 35%, according to a market source.

Goldman Sachs & Co., J.P. Morgan Securities LLC and Deutsche Bank Securities LLC were the joint bookrunners for the Rule 144A offering.

The initial size of the deal had been $435 million with a greenshoe of $65 million.

The notes are non-callable until June 1, 2021 and then may be redeemed from June 1, 2021 to March 1, 2023 subject to a 130% hurdle with a make-whole.

Holders may require the company to redeem the notes upon a fundamental change.

Conversions will be settled in cash, shares or a combination of both, at the company’s option.

In connection with the offering, Twilio will enter into capped call transactions.

The cap price will initially be $105.04, which represents a 100% premium over the last reported sales price of stock, according to the prior announcement.

Proceeds will be used to cover the cost of the call spread and for general corporate purposes.

Twilio is a San Francisco-based cloud communications platform service company.

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