Confluent greenshoe lifts 0% five-year convertibles to $1.1 billion

By Marisa Wong

Los Angeles, Dec. 14 – The underwriters of Confluent Inc.’s recently priced 0% five-year convertible notes exercised their $100 million over-allotment option in full, bringing the total issue size to $1.1 billion, according to an 8-K filing with the Securities and Exchange Commission.

Confluent priced $1 billion of the convertible notes after the market close on Dec. 8 at par with an initial conversion premium of 45%, as previously reported. The offering settled on Monday.

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.

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.

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.

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