By Abigail W. Adams
Portland, Me., March 12 – Bandwidth Inc. priced $250 million of seven-year convertible notes after the market close on Thursday at par with a coupon of 0.5% and an initial conversion premium of 37.5%, according to a company news release.
Pricing came at the cheap end of talk for a coupon of 0% to 0.5% and the midpoint of talk for an initial conversion premium of 35% to 40%, according to a market source.
Morgan Stanley & Co. LLC and J.P. Morgan Securities LLC were joint bookrunners for the Rule 144A offering, which carries a greenshoe of $37.5 million.
The notes are non-callable until April 6, 2025 and then subject to a 130% hurdle.
They are putable upon a fundamental change.
In connection with the offering, the company entered into capped call transactions with a cap price of $260.76, which represents a premium of 100% over the last reported sales price of stock.
Proceeds will be used to cover the cost of the call spread and for general corporate purposes, which may include potential acquisitions and strategic transactions.
Bandwidth is a Raleigh, N.C.-based cloud communications company.
| Issuer: | Bandwidth Inc.
|
| Securities: | Convertible senior notes
|
| Amount: | $250 million
|
| Greenshoe: | $37.5 million
|
| Maturity: | April 1, 2028
|
| Bookrunners: | Morgan Stanley & Co. LLC and J.P. Morgan Securities LLC
|
| Coupon: | 0.5%
|
| Price: | Par
|
| Yield: | 0.5%
|
| Conversion premium: | 37.5%
|
| Conversion price: | $179.27
|
| Conversion rate: | 5.5781
|
| Call options: | Non-callable until April 6, 2025 and then subject to a 130% hurdle
|
| Put options: | Upon a fundamental change
|
| Pricing date: | March 11
|
| Settlement date: | March 16
|
| Distribution: | Rule 144A
|
| Talk: | Coupon of 0% to 0.5% and initial conversion premium of 35% to 40%
|
| Stock symbol: | Nasdaq: BAND
|
| Stock price: | $130.38 at market close March 11
|
| Market capitalization: | $3.26 billion
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