Expedia tightens talk for planned $825 million 0% five-year convertibles to 65%-70% premium

By Rebecca Melvin

New York, Feb. 16 – Price talk for Expedia Group Inc.’s planned $825 million offering of 0% five-year convertible notes was tightened during marketing to an initial conversion premium of 65% to 70%, according to a market source on Tuesday.

The talk earlier in the session when the deal launched was for a premium of 57.5% to 62.5%. The 0% coupon was fixed and remained unchanged.

Expedia announced the deal early Tuesday along with a concurrent offering of senior notes, and with a conditional notice of redemption for all of its outstanding 7% notes due 2025, of which there is $750 million outstanding. The notes will be redeemed at par on March 3.

J.P. Morgan Securities LLC, Goldman Sachs & Co. LLC and BofA Securities Inc. are bookrunners of the Rule 144A convertibles deal, for which there is a $100 million greenshoe.

The notes are non-callable for three years and callable thereafter with a make-whole payment at 130% of the conversion price.

There are no puts except a takeover protection put, and there is standard dividend protection.

The proceeds of the convertibles together with the senior notes will be used to finance the redemption of all of its outstanding 7% notes due 2025 and a portion of its outstanding 6.25% notes due 2025. Remaining proceeds, if any, are earmarked to repay debt.

The proposed notes are expected to be rated Baa3 by Moody’s Investors Service and BBB- by both S&P Global Ratings and Fitch Ratings.

Expedia is a Bellevue, Wash.-based online travel company.

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