Featured image credit: Abigail Lynn on Unsplash
Live Nation Entertainment has increased its offering to $900m (£740m/€834m) in aggregate principal amount of its 3.125% convertible senior notes due 2029, a $50m rise on the previously announced $850m.
A convertible note is a short-term debt that converts into equity and the promoter says it intends to use some of the net proceeds to fund the cost of entering into capped call transactions.
This is where a stock is automatically sold if the price goes beyond or below a predetermined price.
The convertible notes were priced at 100.000% of their principal amount and the remainder of the net proceeds will be used to repurchase a portion of its 2.5% convertible senior notes due 2023, to pay related fees and expenses and for general corporate purposes, which may include the repayment or repurchase of certain of its outstanding indebtedness.
The convertible notes will have an initial conversion rate of 9.2259 shares of Live Nation Entertainment’s common stock per $1,000 principal amount of the Convertible Notes.
The opening conversion price represents a premium of 50% to the $72.26 per share closing price of the company’s common stock on The New York Stock Exchange on January 9, 2023.
The initial closing date of the convertible notes offering is expected to occur today (Thursday).
The convertible notes will accrue interest at a rate of 3.125% per year, payable semi-annually in arrears on January 15 and July 15 each year, beginning in July this year. The convertible notes will mature on January 15, 2029 unless repurchased, redeemed or converted.
The cap price of the capped call transactions will start at $144.52 per share, which represents a premium of 100% over the last reported sale price of the company’s common stock of $72.26 per share on The New York Stock Exchange.
On January 9, Live Nation also agreed to repurchase roughly $440m in aggregate principal amount of the existing convertible notes from a limited number of holders in privately negotiated transactions, for an aggregate purchase price of approximately $489.3m.
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