Inseego greenshoe increases five-year convertibles to $115 million

By Sarah Lizee

Olympia, Wash., May 12 – Underwriters for Inseego Corp.’s five-year convertible notes exercised their greenshoe in full, bringing the total deal size to $115 million, according to an 8-K filing with the Securities and Exchange Commission.

As previously reported, the company priced $100 million of the convertible notes after the market close on Thursday at par at the cheap end of talk with a coupon of 3.25% and an initial conversion premium of 20%.

Price talk was for a coupon of 2.75% to 3.25% and an initial conversion premium of 20% to 25%, according to a market source.

Stifel, Nicolaus & Co. Inc. is the bookrunner for the registered offering.

The notes are non-callable until May 6, 2023 and then subject to a 130% hurdle.

The notes are putable upon a fundamental change.

Following the offering, Golden Harbor Ltd. and North Sound Trading LP will exchange an aggregate principal amount of $44.8 million of the company’s 5.5% notes due 2022 for a combination of $32.1 million in cash and $80 million of the new notes.

The notes issued in the exchange will form part of the same series as the 3.25% notes but be subject to certain transfer restrictions.

Net proceeds were expected to be $111.6 million with the greenshoe exercised in full.

About $49.3 million of net proceeds will be used to terminate the company’s existing credit agreement, $2.3 million will be used to repurchase the series E preferred stock issued to South Ocean, $32.1 million will fund the cash portion of the privately negotiated exchange with the remaining amount to be used for general corporate purposes.

Inseego is a San Diego-based 5G and internet-of-things company.

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