Salesforce.com (CRM) announced the pricing of $1 billion of convertible senior notes due 2018 in a private placement to qualified institutional buyers. The company expects to settle the sale of notes to initial purchasers on March 18.
The company also granted initial purchasers of the notes an option to purchase up to an additional $150 million of notes to cover overallotments.
The interest will be payable semi-annually at a rate of 0.25% per year. The initial conversion rate is 3.7628 shares of common stock per $1,000 principal amount of notes.
In connection with the offering, salesforce.com entered into privately-negotiated convertible note hedge transactions with one or more of the initial purchasers and their affiliates and other financial institutions.
Salesforce.com also entered into privately-negotiated warrant transactions with the hedge counterparties. The strike price of the warrant transactions will initially be approximately $361.58 per share, which is 200% of the closing sale price of salesforce.com's common stock on March 12, 2013.
Salesforce.com expects to use portion of proceeds for cost of convertible note hedge transactions and the remaining proceeds for general corporate purposes.
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