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PagerDuty greenshoe lifts five-year convertibles to $287.5 million
By Sarah Lizee
Olympia, Wash., June 25 – Initial purchasers for PagerDuty Inc.’s five-year convertible notes exercised in full their $37.5 million greenshoe on Thursday, lifting the deal size to $287.5 million, according to an 8-K filing with the Securities and Exchange Commission.
As previously reported, the company priced $250 million of the convertible notes after the market close on Monday at par with a coupon of 1.25% and an initial conversion premium of 30%, according to a company news release.
Pricing came at the rich end of talk for a coupon of 1.25% to 1.75% and at the midpoint of talk for an initial conversion premium of 27.5% to 32.5%, according to a market source.
Morgan Stanley & Co. LLC, J.P. Morgan Securities LLC, Goldman Sachs & Co. LLC and Credit Suisse Securities (USA) LLC were the bookrunners for the Rule 144A offering.
The notes are non-callable until July 6, 2023 and then subject to a 130% hurdle with a make-whole.
They are putable upon a fundamental change. There is dividend protection.
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 $61.66, which represents a premium of 100% over the last reported sales price of stock.
Net proceeds are expected to be $277.6 million with the greenshoe exercised in full.
Proceeds will be used to cover the cost of the call spread, for working capital and for general corporate purposes, which may include potential acquisitions or strategic transactions.
PagerDuty is a San Francisco-based cloud computing company.
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