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HomeAway, Inc. Announces Proposed $350 Million Offering Of Convertible Senior Notes Due 2019

AUSTIN, Texas, March 24, 2014 (GLOBE NEWSWIRE) -- HomeAway, Inc. ("HomeAway") (Nasdaq:AWAY) today announced its intention to offer, subject to market conditions and other factors, $350 million aggregate principal amount of convertible senior notes due 2019 in a private placement to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the "Act"). HomeAway also expects to grant the initial purchasers of the notes a 30-day option to purchase up to an additional $52.5 million aggregate principal amount of the notes to cover over-allotments, if any.

The notes will be unsecured, senior obligations of HomeAway, and interest will be payable semi-annually. Prior to the close of business on the business day immediately preceding October 1, 2018, the notes will be convertible at the option of the note holders only upon the satisfaction of specified conditions and during certain periods. Thereafter until close of business on the second scheduled trading day preceding maturity, the notes will be convertible at the option of the noteholders at any time regardless of these conditions. Conversions of the notes will be settled in cash, shares of HomeAway's common stock or a combination thereof, at HomeAway's election.  Final terms of the notes, including the interest rate, initial conversion rate and other terms, will be determined by negotiations between HomeAway and the initial purchasers of the notes.

In connection with the offering of the notes, HomeAway expects to enter into privately negotiated convertible note hedge transactions with certain financial institutions, which may include certain of the initial purchasers and/or their affiliates (the "hedge counterparties").  The convertible note hedge transactions are expected generally to reduce the potential dilution to HomeAway's common stock upon any conversion of notes and/or offset the cash payments HomeAway is required to make in excess of the principal amount of converted notes, as the case may be, in the event that the market price of HomeAway's common stock is greater than the strike price of the convertible note hedge transactions.  HomeAway also expects to enter into privately negotiated warrant transactions with the hedge counterparties.  The warrant transactions could separately have a dilutive effect if the market price of HomeAway's common stock exceeds the strike price of the warrant transactions, unless HomeAway elects, subject to certain conditions, to settle the warrant transactions in cash.

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