Ice/Glenn - AMZN CVT TERMS
$500mm + $75mm green shoe
AMZN will issue $500mm principal amt of bonds. MSDW gets a 15% ($75mm) "green shoe" (aka, underwriter's allotment), or basically an option to purchase and resell that much. If it's a blowout, MSDW will rake in the premium. This is typical in any equity-type offering.
10 yr maturity
If not called or converted prior to then, on the 10th yr anniversary AMZN owes the principal amount.
coupon of 4-3/4% - 5-1/4% (cash not pik)
Demand for the offering will determine where the coupon is. At 5% on $500mm that's $25mm/yr, cash not paid-in-kind (i.e., more paper for walls).
cvt pm of 23-27%
At the time the CVT is priced, the conversion premium will be set anywhere from 23-27% of the prevailing underlying stock price.
callable in 1st 3 yrs if price is greater than cvt price by 50% for 20/30 trading days prior to call...if called in 1st 3 yrs, then AMZN must pay no less than $187-$213 less interest paid.
E.G., suppose you bought one bond for $100, a 5% coupon, a 25% pm, a $200 callout and AMZN was then at $120. If 1 yr later AMZN zooms to $300, then the company can pay you $200 and take back their bond since $300 > $120 * 1.25 * 1.50.
Hope this helps. Do your own DD.
y
p.s. just officially increased to $1.25bln |
