According to the company, the billion dollars worth of convertible notes will:
- Pay their owners 0.35% interest, paid semiannually.
- Be convertible into common stock or back into cash at approximately a conversion rate of approximately $1,315.10.
- Become convertible at Priceline's discretion -- not the bonds' holders.
Priceline expects to raise close to $979 million from the bond offering after covering fees and expenses. This number could rise, however, as Priceline is giving its underwriters an overallotment option to buy as much as $150 million bonds over the initial $1 billion floatation.
The company also reiterated its intentions for how to use the cash -- by buying up $1 billion worth of its own common stock at today's prices, which offer about a 38% discount to where the bonds might ultimately revert back into stock.
Priceline shares finished the day up 1.9% at $807.54.
Fool contributor Rich Smith has no position in any stocks mentioned. The Motley Fool recommends and owns shares of priceline.com. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.