Priceline.com (PCLN +1.72%) clarified the details this morning on its massive $1 billion bond issue.
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.
