Lyft Announces Pricing of Offering of $650 million of Convertible Senior Notes and Capped Call to Increase Effective Conversi...
May 13 2020 - 1:30AM
Lyft, Inc. (“Lyft”) (NASDAQ:LYFT) today announced the pricing of
$650 million aggregate principal amount of Convertible Senior Notes
due 2025 (the “notes”) in a private offering (the “offering”) to
persons reasonably believed to be qualified institutional buyers
pursuant to Rule 144A under the Securities Act of 1933, as amended
(the “Securities Act”). Lyft also granted the initial purchasers of
the notes a 13-day option to purchase up to an additional
$97.5 million aggregate principal amount of the notes. The
sale of the notes to the initial purchasers is expected to settle
on May 15, 2020, subject to customary closing conditions, and is
expected to result in approximately $637.5 million in net proceeds
to Lyft after deducting the initial purchasers’ discount and
estimated offering expenses payable by Lyft (assuming no exercise
of the initial purchasers’ option to purchase additional notes).
The notes will be senior, unsecured obligations of Lyft. The
notes will bear interest at a rate of 1.50% per year. Interest will
be payable semi-annually in arrears on May 15 and November 15 of
each year, beginning on November 15, 2020. The notes will mature on
May 15, 2025, unless earlier redeemed, repurchased or converted.
Lyft may not redeem the notes prior to May 20, 2023. Lyft may
redeem for cash all or any portion of the notes, at its option, on
or after May 20, 2023, if the last reported sale price of Lyft’s
Class A common stock has been at least 130% of the conversion
price then in effect for at least 20 trading days (whether or not
consecutive), including the trading day immediately preceding the
date on which Lyft provides notice of redemption, during any 30
consecutive trading day period ending on and including the trading
day preceding the date on which Lyft provides notice of redemption
at a redemption price equal to 100% of the principal amount of the
notes to be redeemed, plus any accrued and unpaid interest to, but
excluding, the redemption date. No sinking fund is provided for the
notes, which means that Lyft is not required to redeem or retire
the notes periodically.
Holders of the notes will have the right to require Lyft to
repurchase all or a portion of their notes upon the occurrence of a
fundamental change (as defined in the indenture governing the
notes) at a purchase price of 100% of their principal amount plus
any accrued and unpaid interest. In connection with certain
corporate events or if the Company calls any notes for redemption,
the Company will, under certain circumstances, increase the
conversion rate for noteholders who elect to convert their notes in
connection with any of such corporate events or convert their notes
called for redemption.
The notes will be convertible at an initial conversion rate of
26.0491 shares of Lyft’s Class A common stock, per $1,000
principal amount of notes (equivalent to an initial conversion
price of approximately $38.39 per share, which represents a
conversion premium of approximately 30% to the last reported sale
price of $29.53 per share of Lyft’s Class A common stock on
The Nasdaq Global Select Market on May 12, 2020).
Prior to the close of business on the business day immediately
preceding February 15, 2025, the notes will be convertible at the
option of the noteholders only upon the satisfaction of specified
conditions and during certain periods. On or after February 15,
2025 until the close of business on the second scheduled trading
day preceding the maturity date, the notes will be convertible at
the option of the noteholders at any time regardless of these
conditions. Conversions of the notes will be settled in cash,
shares of Lyft’s Class A common stock, or a combination
thereof, at Lyft’s election.
In connection with the pricing of the notes, Lyft entered into
privately negotiated capped call transactions with certain of the
initial purchasers or their respective affiliates (the “option
counterparties”). The capped call transactions will cover, subject
to anti-dilution adjustments, the number of shares of Class A
common stock underlying the notes sold in the offering. The capped
call transactions are generally expected to reduce potential
dilution to Lyft’s Class A common stock upon any conversion of
notes and/or offset any cash payments Lyft is required to make in
excess of the principal amount of converted notes, as the case may
be, with such reduction and/or offset subject to a cap. The cap
price of the capped call transactions will initially be
approximately $73.83 per share, which represents a premium of
approximately 150% over the last reported sale price of Lyft’s
Class A common stock of $29.53 per share on The Nasdaq Global
Select Market on May 12, 2020, and is subject to certain
adjustments under the terms of the capped call transactions.
Lyft has been advised that, in connection with establishing
their initial hedges of the capped call transactions, the option
counterparties or their respective affiliates expect to purchase
shares of Lyft’s Class A common stock and/or enter into
various derivative transactions with respect to the Class A
common stock concurrently with or shortly after the pricing of the
notes. This activity could increase (or reduce the size of any
decrease in) the market price of the Class A common stock or
the notes at that time. In addition, the option counterparties or
their respective affiliates may modify their hedge positions by
entering into or unwinding various derivatives with respect to the
Class A common stock and/or purchasing or selling the
Class A common stock or other securities of Lyft in secondary
market transactions from time to time prior to the maturity of the
notes (and are likely to do so following any conversion, repurchase
or redemption of the notes, to the extent Lyft exercises the
relevant election under the capped call transactions). This
activity could also cause or avoid an increase or a decrease in the
market price of the Class A common stock or the notes, which
could affect the ability of noteholders to convert the notes and,
to the extent the activity occurs following a conversion or during
any observation period related to a conversion of notes, it could
affect the number of shares and value of the consideration that
noteholders will receive upon conversion of the notes.
Lyft intends to use approximately $115.38 million of the net
proceeds from the offering to pay the cost of the capped call
transactions described above. If the initial purchasers exercise
their option to purchase additional notes, Lyft expects to use a
portion of the net proceeds from the sale of such additional notes
to enter into additional capped call transactions with the option
counterparties. Lyft intends to use the remainder of the net
proceeds of the offering for general corporate purposes, which may
include working capital, capital expenditures, and potential
acquisitions and strategic transactions. However, it has not
designated any specific uses and has no current agreements with
respect to any material acquisition or strategic transactions.
The notes were and will only be offered to persons reasonably
believed to be qualified institutional buyers pursuant to Rule 144A
under the Securities Act. Neither the notes nor the shares of
Lyft’s Class A common stock potentially issuable upon
conversion of the notes, if any, have been, or will be, registered
under the Securities Act or the securities laws of any other
jurisdiction, and unless so registered, may not be offered or sold
in the United States except pursuant to an applicable exemption
from such registration requirements.
This announcement is neither an offer to sell nor a solicitation
of an offer to buy any of these securities and shall not constitute
an offer, solicitation or sale in any jurisdiction in which such
offer, solicitation or sale is unlawful.
Investor Contact:Shawn
Woodhullinvestor@lyft.com
Media Contact:Adrian Durbin / Alexandra
LaMannapress@lyft.com
Lyft (NASDAQ:LYFT)
Historical Stock Chart
From Mar 2024 to Apr 2024
Lyft (NASDAQ:LYFT)
Historical Stock Chart
From Apr 2023 to Apr 2024