Benefitfocus seeks US$200m from CB financing

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Anthony Hughes

Benefits management software provider Benefitfocus suffered a steep share price fall in Thursday’s session as it marketed a US$200m convertible bond financing.

In what is likely the last CB offering of 2018, JP Morgan and Morgan Stanley were leading the one-day marketed 144A sale of five-year CBs with a 0.75%-1.2% coupon and 30%-35% conversion premium.

The two banks are active bookrunners, while Credit Suisse has a passive role on the deal, market sources said.

Benefitfocus expects to use the offering proceeds to fund the cost of capped call transactions, potential acquisitions and for general corporate purposes.

In mid-session trading, Benefitfocus shares were trading down 16% to US$42.02, though the stock is still up more than 50% this year. The deal is expected to price after the close.

Launched just a day after the company held an analyst day in New York, the deal is the latest in a flood of CB financings out of the US software sector this year.