Groupon Descends on Financing Arrangement

Groupon, Inc. (NASDAQ: GRPN) shares started Wednesday in the red on announcing that it has entered into privately negotiated agreements with certain of the holders of its existing (a) 1.125% Convertible Senior Notes due 2026 and (b) 6.25% Convertible Senior Secured Notes due 2027 to (i) exchange an aggregate principal amount of $20,000,000 of 2026 Notes for an aggregate principal amount of $20,000,000 newly issued series of 4.875% Convertible Senior Notes due 2030 and (ii) exchange an aggregate principal amount of $150,000,000 of 2027 Notes for an aggregate principal amount of $224,071,000 2030 Notes.

This morning’s news release also stated that the 2030 Notes will be senior unsecured obligations of Groupon and will be issued pursuant to an indenture to be entered into by and between Groupon and U.S. Bank National Association, as trustee.

The 2030 Notes Indenture will contain certain customary non-financial covenants, including payment of principal and interest on the 2030 Notes, maintenance of corporate existence, and delivery of required reports and information to the trustee. The 2030 Notes will accrue interest payable semi-annually in arrears. The 2030 Notes will be convertible into cash, shares of Groupon's common stock, par value $0.0001 per share or a combination of cash and shares of Common Stock, at Groupon's election.

The Exchange is expected to close on or around July 2.

The Chicago-based Groupon said its shares lost 33 cents to $35.70.