Bill.com Holdings talks $750 million five-year convertibles to yield 0%-0.25%, up 40%-45%

By Rebecca Melvin

New York, Nov. 24 – Bill.com Holdings Inc. plans to price a $750 million issue of convertible notes due 2025 after the market close on Tuesday, according to a market source.

The Rule 144A offering has a $112.5 million greenshoe and was being sold via joint bookrunners Goldman Sachs & Co. LLC, BofA Securities Inc., Morgan Stanley & Co. LLC and J.P. Morgan Securities LLC.

The offering was being talked with a 0% to 0.25% coupon and a 40% to 45% initial conversion premium.

The notes are non-callable for three years and then are provisionally callable after Dec. 5, 2023 if shares exceed 130% of the conversion price for a specified period of time.

There are no puts and settlement will be in cash, shares or a combination of cash and shares at the issuer’s option.

There is change-of-control protection via a make-whole adjustment premium of incremental shares delivered upon conversion, and also dividend protection via conversion rate adjustment on any quarterly dividends.

In connection with the offering of notes, the company is entering into capped call transactions with some of the initial purchasers of the notes, according to a company news release.

The proceeds of the new notes will be used to fund the cost of the call spread and for general corporate purposes, which may include working capital, capital expenditures and potential acquisitions and strategic transactions.

The Palo Alto, Calif.-based cloud-based software company automates back-office financial operations for small and mid-size businesses.

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