By Abigail W. Adams
Portland, Me., March 6 – MicroStrategy Inc. priced an upsized $700 million of six-year convertible notes after the market close on Tuesday at par with a coupon of 0.625% and an initial conversion premium of 42.5%, according to a company news release.
Pricing came toward the rich end of talk for a coupon of 0.5% to 1% and at the rich end of talk for an initial conversion premium of 37.5% to 42.5%, according to a market source.
Citigroup Global Markets Inc., Moelis & Co. and TD Cowen were bookrunners for the Rule 144A offering, which carries an upsized greenshoe of $100 million.
The initial size of the offering was $600 million with a greenshoe of $90 million.
The notes are non-callable until March 22, 2027 and then subject to a 130% hurdle.
If called, at least $90 million in principal must remain outstanding if the full outstanding amount is not redeemed in full.
The notes are putable on Sept. 15, 2028 or upon a fundamental change.
They will be settled in cash, shares or a combination of both at the company’s option.
Net proceeds are expected to be $684.3 million or will be $782 million if the greenshoe is exercised in full.
Proceeds will be used for the purchase of Bitcoin and for general corporate purposes.
MicroStrategy is a Tysons Corner. Va.-based business intelligence and analytics company.
| Issuer: | MicroStrategy Inc.
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| Amount: | $700 million
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| Greenshoe: | $100 million
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| Issue: | Convertible senior notes
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| Maturity: | March 15, 2030
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| Bookrunners: | Citigroup Global Markets Inc., Moelis & Co. and TD Cowen
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| Coupon: | 0.625%
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| Price: | Par
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| Yield: | 0.625%
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| Conversion premium: | 42.5%
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| Conversion price: | $1,497.68
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| Conversion rate: | 0.677
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| Call options: | Non-callable until March 22, 2027 and then subject to a 130% hurdle
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| Put options: | Sept. 15, 2028 or upon a fundamental change
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| Pricing date: | March 5
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| Settlement date: | March 8
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| Distribution: | Rule 144A
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| Talk: | Coupon of 0.5% to 1% and initial conversion premium of 37.5% to 42.5%
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| Stock symbol: | Nasdaq: MSTR
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| Stock price: | $1,051.01
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| Market capitalization: | $17.83 billion
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