Sea Limited talks $400 million five-year convertible notes to yield 2% to 2.5%, up 30% to 35%

By Abigail W. Adams

Portland, Me., June 13 – Sea Ltd. plans to price $400 million in five-year convertible notes after the market close on Wednesday with price talk for a coupon of 2% to 2.5% and an initial conversion premium of 30% to 35%, according to a market source.

Goldman Sachs & Co. is the bookrunner for the Rule 144A and Regulation S deal, which carries a greenshoe of $60 million.

The notes are non-callable, except in the event of certain changes in the tax laws. They are puttable upon a fundamental change.

The notes are contingently convertible until Jan. 1, 2023, then freely convertible until the second scheduled trading day preceding July 1, 2023.

The notes will be settled in Sea’s American Depositary Shares, each representing one class A ordinary share, cash or a combination of both at the company’s option.

Tencent Holdings Ltd., one of the company’s principal shareholders, is expected to purchase up to $50 million of the notes in the offering on the same terms as the other convertibles being offered, according to a company news release.

Proceeds will be used for business expansion and other general corporate purposes.

Sea is a Singapore-based company that operates three platforms across digital entertainment, ecommerce, and digital financial services.

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