Benefitfocus Inc. completed the private offering of $240 million aggregate principal amount of its 1.25% convertible senior notes due Dec. 15, 2023, to qualified institutional buyers.
That amount includes the initial purchasers' exercise of their option to buy up to an additional $40 million aggregate principal amount of the notes.
Interest on the notes will be payable semiannually in arrears on June 15 and Dec. 15 of each year, starting June 15, 2019. The notes may be redeemable for cash, in whole or in part, on or after Dec. 20, 2021.
Net proceeds from the offering were about $233.6 million, after deducting the initial purchasers' discounts and commissions and the estimated offering expenses payable by the company.
The company used about $33 million of the net proceeds to pay the cost of the capped call transactions that it entered with one or more of the early buyers of the notes. About $39.2 million of the net proceeds will be used to pay off, but not terminate, the company's senior secured credit facility. The remainder of the net proceeds will be used for potential acquisitions and other general corporate purposes, including sales and marketing expenses, research and development expenses and general and administrative expenses.
U.S. Bank NA will act as trustee in connection with the issuance of the notes.