Ceridian talks $500 million five-year convertible notes to yield 0%-0.5%, up 47.5%-52.5%

By Abigail W. Adams

Portland, Me., March 1 – Ceridian HCM Holding Inc. plans to price $500 million of five-year convertible notes after the market close on Tuesday with price talk for a coupon of 0% to 0.5% and an initial conversion premium of 47.5% to 52.5%, according to a market source.

Goldman Sachs & Co. LLC, J.P. Morgan Securities LLC, BofA Securities Inc., Deutsche Bank Securities Inc. and Citigroup Global Markets Inc. are joint bookrunners for the Rule 144A offering, which carries a greenshoe of $75 million.

The notes are non-callable for three years and then subject to a 130% hurdle.

There is dividend and takeover protection.

The convertible notes will be settled in cash, shares or a combination of both at the company’s option.

In connection with the pricing of the notes, the company will enter into capped call transactions.

Proceeds will be used to cover the cost of the call spread, to repay $295 million of the principal amount of the company’s senior credit facilities and for general corporate purposes, which may include potential acquisitions or strategic investments.

Ceridian is a Minneapolis-based human resources software company.

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