Having a base in multiple jurisdictions can be tricky. Just ask Yandex N.V. (NASDAQ: YNDX). The company is one of the top internet companies in Europe and is the considered to be the leading search provider in Russia. That said, the shares trade actively in the United States and the press releases are also released in Moscow. Yandex had a market cap of about $13.5 billion coming into Tuesday, and now the company priced $1.25 billion in new capital by selling convertible senior notes.
A filing with the U.S. Securities and Exchange Commission showed that the convertible are due in 2025. The notes are shown come with a 0.75% coupon and are shown to be convertible into Yandex’s Class A ordinary shares and the initial conversion price was set at a premium of 47.5% above the volume weighted average price (VWAP) of a NASDAQ Global Select Market-listed share between opening and closing of trading on the launch date. The price will also be announced after the close of trading on that day.
As far as how Yandex plans to use the capital, it intends to use the proceeds for general corporate purposes and for capital expenditures, strategic investments or acquisitions and share buybacks.
While Yandex stated is “use of proceeds,” the company also noted that it has “no current agreements or commitments with respect to any material investment, acquisition, or strategic transaction.”
The Yandex filing said:
The conversion rights will be satisfied, at Yandex’s election, with cash, Shares, or any combination thereof including, unless the Company elects otherwise, by way of net share settlement. The initial conversion price of the Notes will be subject to customary adjustment provisions as will be set out in the terms and conditions of the Notes (the “Conditions”).
The Notes will be issued at par and will carry a coupon of 0.75% per annum, payable semi-annually in arrear on March 03 and September 03 in each year, with the first interest payment date on September 03, 2020. Settlement and delivery of the Notes is expected to take place on or about March 03, 2020 (the “Settlement Date”). If not previously redeemed, repurchased or converted in accordance with the Conditions, the Notes will be redeemed on March 03, 2025.
The Notes will, when issued, constitute senior unsecured obligations of the Company. Yandex may not redeem the Notes prior to maturity, except in specified circumstances, including if, at any time from March 18, 2023, the value of a Share exceeds 130% of the then prevailing conversion price for a specified period of time or if, at any time, Notes representing 85% or more of the aggregate principal amount of the Notes originally issued shall have been previously converted and/or repurchased and cancelled.
While the Dow, S&P and NASDAQ were continuing in their sell-off with an average of a 3% loss, Yandex’s ADSs were last seen down 4.5% at $40.15 and down from a 52-week high of $48.95. With just a few minutes until the closing bell, Yandex’s NASDAQ volume of more than 14.6 million shares was roughly 6-times normal trading volume and was the most active trading day for its shares since last November when its shares rallied from under $36 to over $40.