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Benefitfocus to offer $200M of senior unsecured notes

Benefitfocus Inc. is offering $200 million worth of senior convertible notes which will be due on Dec. 15, 2023.

The notes will be offered to qualified institutional buyers. The company also expects to grant the initial buyers the option to purchase up to an additional $40 million worth of notes within a 13-day period from the date of first purchase.

Interest will be payable semiannually in arrears on June 15 and Dec. 15 of each year, starting June 15, 2019.

The notes are convertible into cash, shares or a combination of the two.

Benefitfocus intends to use a portion of the proceeds to pay the cost of the capped call transactions that the company may enter with one of the early buyers of the notes. The company will also use about $39.2 million from the proceeds to repay, but not terminate its senior secured credit facility. The remainder of the net proceeds from the offering 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.