By Abigail W. Adams
Portland, Me., March 3 – Ceridian HCM Holding Inc. priced $500 million of five-year convertible notes after the market close on Tuesday at par with a coupon of 0.25% and an initial conversion premium of 47.5%, according to a company news release.
Pricing came at the midpoint of talk for a coupon of 0% to 0.5% and at the cheap end of talk for an initial conversion premium of 47.5% to 52.5%, according to a market source.
Goldman Sachs & Co. LLC, J.P. Morgan Securities LLC, BofA Securities Inc., Deutsche Bank Securities Inc. and Citigroup Global Markets Inc. were joint bookrunners for the Rule 144A offering, which carries a greenshoe of $75 million.
The notes are non-callable until March 20, 2024 and then subject to a 130% hurdle.
They are putable upon a fundamental change.
There is dividend protection.
The convertible notes will be settled in cash, shares or a combination of both at the company’s option.
In connection with the pricing of the notes, the company entered into capped call transactions with a cap price of $179.26, which represents a premium of 100% over the last reported sales price of stock.
Net proceeds are expected to be $486.7 million or will be $559.8 million if the greenshoe is exercised in full.
Proceeds will be used to cover the cost of the call spread, to repay $295 million of the principal amount of the company’s senior credit facilities and for general corporate purposes, which may include potential acquisitions or strategic investments.
Ceridian is a Minneapolis-based human resources software company.
| Issuer: | Ceridian HCM Holding Inc.
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| Securities: | Convertible senior notes
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| Amount: | $500 million
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| Greenshoe: | $75 million
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| Maturity: | March 15, 2026
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| Bookrunners: | Goldman Sachs & Co. LLC, J.P. Morgan Securities LLC, BofA Securities Inc., Deutsche Bank Securities Inc. and Citigroup Global Markets Inc.
|
| Coupon: | 0.25%
|
| Price: | Par
|
| Yield: | 0.25%
|
| Conversion premium: | 47.5%
|
| Conversion price: | $132.20
|
| Conversion rate: | 7.5641
|
| Call options: | Non-callable until March 20, 2024 and then subject to a 130% hurdle
|
| Put options: | Upon a fundamental change
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| Pricing date: | March 2
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| Settlement date: | March 5
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| Distribution: | Rule 144A
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| Talk: | Coupon of 0% to 0.5% and initial conversion premium of 47.5% to 52.5%
|
| Stock symbol: | NYSE: CDAY
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| Stock price: | $89.63 at market close March 2
|
| Market capitalization: | $13.34 billion
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