Sphere Entertainment greenshoe exercised, lifts 3.5% convertible notes to $258.75 million

By Wendy Van Sickle

Columbus, Ohio, Dec. 8 – Sphere Entertainment Co. issued $258.75 million of five-year convertible notes on Friday, which included the underwriters’ full exercise of the $33.75 million greenshoe, according to an 8-K filing with the Securities and Exchange Commission.

The company priced the initial $225 million of the convertibles after the market close on Dec. 5 at par with a coupon of 3.5% and an initial conversion premium of 25%, as previously reported.

Pricing came at the midpoint of talk for a coupon of 3.25% to 3.75% and the cheap end of talk for an initial conversion premium to 25% to 30%.

BofA Securities Inc. and J.P. Morgan Securities LLC were bookrunners for the Rule 144A offering.

The notes will be settled in cash, shares or a combination of both at the company’s option.

In connection with the offering, the company entered into capped call transactions with a cap price of $42.62, which represents a 50% premium over the last reported price of stock.

Net proceeds will be $250.4 million with the greenshoe.

Approximately $12.4 million will be used to cover the call spread with the remainder to be used for general corporate purposes.

Sphere Entertainment is a New York-based live entertainment and media company.

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