SEATTLE, Oct. 14, 2020 /PRNewswire/ -- Redfin Corporation
(NASDAQ: RDFN) today announced that it proposes to offer
$525 million aggregate principal
amount of convertible senior notes due 2025 (the "notes"), subject
to market conditions and other factors. The notes are to be sold
only to qualified institutional buyers pursuant to Rule 144A under
the Securities Act of 1933 (the "Act"). Redfin also intends to
grant to the initial purchaser of the notes an option to purchase
up to an additional $78.75 million
aggregate principal amount of notes for settlement within a period
of 13 days from, and including, the date notes are first
issued.
The notes will be general unsecured obligations of Redfin, and
interest will be payable semi-annually in arrears.
The notes will mature on October 15,
2025, unless repurchased, redeemed or converted in
accordance with their terms prior to such date. Prior to
July 15, 2025, the notes will be
convertible at the option of holders only upon satisfaction of
certain conditions and during certain periods, and thereafter, at
any time until the close of business on the second scheduled
trading day immediately preceding the maturity date. Upon
conversion, the notes may be settled in shares of Redfin common
stock, cash or a combination of cash and shares of Redfin common
stock, at the election of Redfin.
The interest rate, initial conversion rate, offering price and
other terms are to be determined by negotiations between Redfin and
the initial purchaser.
Redfin expects to use a portion of the net proceeds from the
offering of the notes, together with shares of Redfin common stock,
to repurchase a portion of its outstanding 1.75% convertible senior
notes due 2023 (the "2023 notes") as described below. Redfin
expects to use the remainder of the net proceeds from this offering
for working capital and other general corporate purposes. Redfin
may also use a portion of the net proceeds to invest in or acquire
third-party businesses, products, services, technologies or other
assets.
Redfin expects to use a portion of the net proceeds of the
offering, together with shares of its common stock, to repurchase a
portion of its 2023 notes through privately negotiated transactions
entered into concurrently with the pricing of the proposed offering
(the "note repurchases"). In connection with any note repurchases,
Redfin expects that holders of the outstanding 2023 notes that have
hedged their equity price risk with respect to such notes (the
"hedged holders") will, concurrently with the pricing of the notes,
unwind their hedge positions by buying Redfin common stock (to the
extent they will not receive shares of Redfin common stock in
connection with such note repurchases) and/or entering into or
unwinding various derivative transactions with respect to Redfin
common stock. The amount of Redfin common stock to be purchased by
the hedged holders may be substantial in relation to the historic
average daily trading volume of Redfin common stock. This activity
by the hedged holders could increase (or reduce any decrease) in
the market price of Redfin common stock and may increase the
effective conversion price of the notes.
This announcement is neither an offer to sell nor a solicitation
of an offer to buy any Redfin securities (including the shares of
Redfin common stock, if any, into which the notes are convertible)
and shall not constitute an offer, solicitation or sale in any
jurisdiction in which such offer, solicitation or sale is unlawful.
Any offers of the notes will be made only by means of a private
offering memorandum.
The notes, any shares of Redfin common stock issuable upon
conversion of the notes and any shares of Redfin common stock
issuable in connection with any repurchases of the 2023 notes have
not been registered under the Act, or any state securities laws,
and may not be offered or sold in the
United States absent registration or an applicable exemption
from such registration requirements.
Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of federal securities laws including, statements
relating to the timing of the proposed offering, the proposed
repurchases of the 2023 notes, expected actions of holders of the
2023 notes that participate in the note repurchases and expected
use of proceeds from the proposed offering. We believe our
expectations related to these forward-looking statements are
reasonable, but actual results may turn out to be materially
different. Factors that could cause actual results to differ
materially from the forward-looking statements in this press
release include prevailing market conditions, the impact of general
economic, industry or political conditions in the United States or internationally and the
impact of COVID-19. Additional factors include those
identified under the heading "Risk Factors" in our annual report
for the year ended December 31, 2019,
as supplemented by our quarterly report for the quarter ended
June 30, 2020, both of which are
available on our Investor Relations website at
http://investors.redfin.com and on the SEC website at
www.sec.gov. All forward-looking statements reflect our
beliefs and assumptions only as of the date of this press release.
We undertake no obligation to update forward-looking statements to
reflect future events or circumstances.
About Redfin
Redfin is a technology-powered residential real estate company,
redefining real estate in the consumer's favor in a
commission-driven industry. We do this by integrating every step of
the home buying and selling process and pairing our own agents with
our own technology, creating a service that is faster, better and
costs less. We offer brokerage, iBuying, mortgage, and title
services, and we also run the country's #1 real estate brokerage
search site, offering a host of online tools to consumers,
including the Redfin Estimate. We represent people buying and
selling homes in over 90 markets in the
United States and Canada.
Since our launch in 2006, we have saved our customers over
$800 million and we've helped them
buy or sell more than 235,000 homes worth more than $115 billion.
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SOURCE Redfin