Medallia Announces Pricing of Offering of $500 Million of Convertible Senior Notes

Medallia, Inc. (“Medallia”) (NYSE:MDLA) today announced the pricing of $500 million aggregate principal amount of Convertible Senior Notes due 2025 (the “notes”) in a private offering (the “offering”) to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”). Medallia also granted the initial purchasers of the notes a 13-day option to purchase up to an additional $75 million aggregate principal amount of the notes. The sale of the notes to the initial purchasers is expected to settle on September 18, 2020, subject to customary closing conditions, and is expected to result in $485.3 million in net proceeds to Medallia after deducting the initial purchasers’ discount and estimated offering expenses payable by Medallia (assuming no exercise of the initial purchasers’ option to purchase additional notes).

The notes will be senior, unsecured obligations of Medallia. The notes will bear interest at a rate of 0.125% per year. Interest will be payable semi-annually in arrears on March 15 and September 15 of each year, beginning on March 15, 2021. The notes will mature on September 15, 2025, unless earlier redeemed, repurchased or converted. Medallia may not redeem the notes prior to September 20, 2023. Medallia may redeem for cash all or any portion of the notes, at its option, on or after September 20, 2023, if the last reported sale price of Medallia’s common stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive), during any 30 consecutive trading day period (including the last trading day of such period) ending on and including the trading day preceding the date on which Medallia provides notice of redemption at a redemption price equal to 100% of the principal amount of the notes to be redeemed, plus any accrued and unpaid interest to, but excluding, the redemption date. No sinking fund is provided for the notes, which means that Medallia is not required to redeem or retire the notes periodically.

Holders of the notes will have the right to require Medallia to repurchase all or a portion of their notes upon the occurrence of a fundamental change (as defined in the indenture governing the notes) at a purchase price of 100% of their principal amount plus any accrued and unpaid interest. In connection with certain corporate events or if the Company calls any notes for redemption, the Company will, under certain circumstances, increase the conversion rate for noteholders who elect to convert their notes in connection with any such corporate event or convert their notes called for redemption (unless Medallia permits all notes to convert in connection with any partial redemption).