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Live Nation Entertainment has increased its offering to $900m (\u00a3740m\/\u20ac834m) in aggregate principal amount of its 3.125% convertible senior notes due 2029, a $50m rise on the previously announced $850m.<\/p>\n
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.<\/p>\n
This is where a stock is automatically sold if the price goes beyond or below a predetermined price.<\/p>\n
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.<\/p>\n
The convertible notes will have an initial conversion rate of 9.2259 shares of Live Nation Entertainment\u2019s common stock per $1,000 principal amount of the Convertible Notes.<\/p>\n
The opening conversion price represents a premium of 50% to the $72.26 per share closing price of the company\u2019s common stock on The New York Stock Exchange on January 9, 2023.<\/p>\n
The initial closing date of the convertible notes offering is expected to occur today (Thursday).<\/p>\n
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.<\/p>\n
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\u2019s common stock of $72.26 per share on The New York Stock Exchange.<\/p>\n
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.<\/p>\n
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