Super Micro Computer talks $1.5 billion five-year convertibles to yield 0%-0.5%, up 35%-40%

By Abigail W. Adams

Portland, Me., Feb. 21 – Super Micro Computer Inc. plans to price $1.5 billion of five-year convertible notes after the market close on Thursday with price talk for a coupon of 0% to 0.5% and an initial conversion premium of 35% to 40%, according to a market source.

Goldman Sachs & Co. LLC, BofA Securities Inc., J.P. Morgan Securities LLC and BMO Capital Markets Corp. are bookrunners for the Rule 144A offering, which carries a greenshoe of $225 million.

ICR Capital LLC acted as financial adviser to the company.

The notes are non-callable for three years and then subject to a 130% hurdle.

They are putable upon a fundamental change.

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

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

Proceeds will be used to cover the cost of the call spread and for general corporate purposes, including growth and business expansion.

Super Micro is a San Jose, Calif.-based information technology company.

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