SEATTLE, Oct. 15, 2020 /PRNewswire/ -- Redfin
Corporation (NASDAQ: RDFN) today announced that it has priced
$575 million aggregate principal
amount of 0% convertible senior notes due 2025 (the "notes"). The
aggregate principal amount of the offering was increased from the
previously announced offering size of $525
million. 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 granted the initial purchaser of
the notes an option to purchase up to an additional $86.25 million aggregate principal amount of
notes. The sale is expected to close on October 20, 2020, subject to customary closing
conditions.
The notes will be general unsecured obligations of Redfin, and
will not bear regular interest, and the principal amount of the
notes will not accrete.
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.
Redfin may not redeem the notes prior to October 20, 2023. Redfin may redeem for cash all
or any portion (so long as at least $100
million principal amount remains outstanding) of the
notes, at its option, on or after October
20, 2023 if the last reported sale price of Redfin 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
Redfin provides notice of redemption, during any 30 consecutive
trading day period ending on, and including, the trading day
immediately preceding the date on which Redfin provides notice of
redemption. The redemption price will be 100% of the principal
amount of the notes to be redeemed, plus any accrued and
unpaid special interest to, but excluding, the redemption date.
Holders of the notes will have the right to require Redfin to
repurchase for cash all or a portion of their notes at 100% of
their principal amount, plus any accrued and unpaid special
interest, upon the occurrence of a fundamental change (as defined
in the indenture relating to the notes). Redfin will also be
required to increase the conversion rate for holders who convert
their notes in connection with certain fundamental changes
occurring prior to the maturity date or convert their notes called
(or deemed called) for redemption in connection with Redfin's
issuance of a notice of redemption.
The notes will have an initial conversion rate of 13.7920 shares
of Redfin's common stock per $1,000
principal amounts of notes (which is subject to adjustment in
certain circumstances). This is equivalent to an initial conversion
price of approximately $72.51 per
share. The initial conversion price represents a premium of
approximately 40% to the $51.79 per
share closing price of Redfin's common stock on The Nasdaq Global
Select Market on October 15,
2020.
Redfin estimates that the net proceeds from the offering will be
approximately $562.8 million (or
$647.4 million if the initial
purchaser exercises its option to purchase additional notes in
full), after deducting the initial purchaser's discount and
estimated offering expenses payable by Redfin.
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.
Concurrently with the pricing of the offering, Redfin entered
into privately negotiated transactions with certain holders of its
2023 notes to repurchase approximately $116.9 million of aggregate principal amount of
such notes, and pay accrued and unpaid interests thereon, for
approximately $107.4 million in cash
and approximately 2.1 million shares of our common stock. In
connection with such 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") may
have, concurrently with the pricing of the notes, unwound their
hedge positions by buying Redfin common stock (to the extent they
will not receive shares of Redfin common stock in connection with
such repurchase) and/or entered into or unwound various derivative
transactions with respect to Redfin common stock. This activity by
the hedged holders could have increased (or reduced any decrease)
in the market price of Redfin common stock and may have affected
the market price of Redfin common stock concurrently with the
pricing of the notes, and could have increased 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.
Offers of the notes are being 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 closing of the proposed offering 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.
Redfin-F
View original content to download
multimedia:http://www.prnewswire.com/news-releases/redfin-prices-offering-of-575-million-of-0-convertible-senior-notes-due-2025-301153863.html
SOURCE Redfin