By Abigail W. Adams
Portland, Me., Aug. 16 – Akamai Technologies Inc. priced an upsized $1.1 billion of long five-year convertible notes after the market close on Tuesday at par to yield 1.125% for an initial conversion premium of 22.5%, according to a market source and a company news release.
The notes priced at the rich end of talk for a coupon of 1.125% to 1.625% and at the cheap end of talk for an initial conversion premium of 22.5% to 27.5%.
Citigroup Global Markets Inc., J.P. Morgan Securities LLC, Morgan Stanley & Co. LLC and BofA Securities Inc. were bookrunners for the Rule 144A offering, which carries an upsized greenshoe of $165 million.
The initial size of the offering was $1 billion with a greenshoe of $150 million.
The notes are non-callable.
There is dividend and takeover protection.
The notes will be settled in cash up to the principal amount with any remainder to be settled in cash, shares or a combination of both at the company’s option.
In connection with the offering, the company will enter into convertible note hedge and warrant transactions.
Net proceeds are expected to be $1,084,000,000 or will be $1,247,400,000 if the greenshoe is exercised in full.
Approximately $127.3 million of net proceeds will be used to cover the cost of the hedge transactions and approximately $75 million will be used to repurchase common stock from the initial purchasers of the notes in privately negotiated transactions.
Remaining proceeds will be used to repay at maturity a portion of the $1.15 billion outstanding of its 0.125% convertible notes due May 1, 2025 or cover cash amounts due upon their early conversion.
Akamai is a Cambridge, Mass.-based content delivery network and cloud service provider.
| Issuer: | Akamai Technologies Inc.
|
| Amount: | $1.1 billion
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| Greenshoe: | $165 million
|
| Issue: | Convertible senior notes
|
| Maturity: | Feb. 15, 2029
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| Bookrunners: | Citigroup Global Markets Inc., J.P. Morgan Securities LLC, Morgan Stanley & Co. LLC and BofA Securities Inc.
|
| Coupon: | 1.125%
|
| Price: | Par
|
| Yield: | 1.125%
|
| Conversion premium: | 22.5%
|
| Conversion price: | $126.31
|
| Conversion rate: | 7.9170
|
| Call options: | None
|
| Put options: | Upon a fundamental change
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| Pricing date: | Aug. 15
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| Settlement date: | Aug. 18
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| Distribution: | Rule 144A
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| Talk: | Coupon of 1.125%-1.625% and initial conversion premium of 22.5%-27.5%
|
| Stock symbol: | Nasdaq: AKAM
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| Stock price: | $103.11 at market close Aug. 15
|
| Market capitalization: | $15.67 billion
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