By Abigail W. Adams
Portland, Me., Dec. 9 – Confluent Inc. priced $1 billion of five-year convertible notes after the market close on Wednesday at par with a coupon of 0% and an initial conversion premium of 45%, according to a company press release.
Pricing came at the rich end of talk for a coupon of 0% to 0.5% and richer than initial talk for an initial conversion premium of 37.5% to 42.5%, according to a market source.
Morgan Stanley & Co. LLC (lead left), J.P. Morgan Securities LLC, Goldman Sachs & Co. LLC, BofA Securities Inc. and Citigroup Global Markets Inc. were bookrunners for the Rule 144A offering, which carries a greenshoe of $100 million.
The notes are non-callable until Jan. 20, 2025 and then subject to a 130% hurdle.
They are putable upon a fundamental change.
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 $138.02, which represents a premium of 100% over the last reported sales price of stock.
Net proceeds are expected to be $982.1 million or will be $1,080,400,000 if the greenshoe is exercised in full.
Proceeds will be used to cover the cost of the call spread and for general corporate purposes, which may include acquisitions or strategic investments.
Confluent is a Mountain View, Calif.-based data streaming platform.
| Issuer: | Confluent Inc.
|
| Amount: | $1 billion
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| Greenshoe: | $100 million
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| Issue: | Convertible senior notes
|
| Maturity: | Jan. 15, 2027
|
| Bookrunners: | Morgan Stanley & Co. LLC (lead left), J.P. Morgan Securities LLC, Goldman Sachs & Co. LLC, BofA Securities Inc. and Citigroup Global Markets Inc.
|
| Coupon: | 0%
|
| Price: | Par
|
| Yield: | 0%
|
| Conversion premium: | 45%
|
| Conversion price: | $100.06
|
| Conversion rate: | 9.9936
|
| Call options: | Non-callable until Jan. 20, 2025 and then subject to a 130% hurdle
|
| Put options: | Upon a fundamental change
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| Pricing date: | Dec. 8
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| Settlement date: | Dec. 13
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| Distribution: | Rule 144A
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| Talk: | Coupon of 0% to 0.5% and initial conversion premium of 37.5% to 42.5%
|
| Stock symbol: | Nasdaq: CFLT
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| Stock price: | $69.01 at market close Dec. 9
|
| Market capitalization: | $18.25 billion
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