ServiceNow (NYSE: NOW), the enterprise IT cloud company, today announced that it has priced $500 million aggregate principal amount of 0% Convertible Senior Notes due 2018 (the “notes”). The notes will be sold to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended. ServiceNow also granted the initial purchasers of the notes an option to purchase up to an additional $75 million aggregate principal amount of notes, solely to cover over-allotments. The sale is expected to close on November 13, 2013, subject to customary closing conditions.
Morgan Stanley, J.P. Morgan, BofA Merrill Lynch, RBC Capital Markets and Wells Fargo Securities are acting as initial purchasers of the notes.
The notes will mature on November 1, 2018, unless repurchased or converted in accordance with their terms prior to such date. Prior to July 1, 2018, 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 ServiceNow common stock, cash or a combination of cash and shares of ServiceNow common stock, at the election of ServiceNow.
Holders of the notes will have the right to require ServiceNow to repurchase all or a portion of their notes at 100 percent of their principal amount, plus accrued and unpaid special interest, if any, upon the occurrence of a fundamental change (as defined in the indenture relating to the notes). ServiceNow 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.
The notes will have an initial conversion rate of 13.5357 shares of common stock per $1,000 principal amount of notes (which is subject to adjustment in certain circumstances). This represents an initial effective conversion price of approximately $73.88 per share. The initial conversion price represents a premium of approximately 37.5% to the $53.73 per share closing price of ServiceNow common stock on the New York Stock Exchange on November 6, 2013.