Porch Group announces $333 million convertible notes financing

Porch Group announced the pricing of a private offering of $333 million aggregate principal amount of its 6.75% Senior Secured Convertible Notes due 2028 in a private placement transaction, and a concurrent privately negotiated repurchase of $200 million aggregate principal amount of its 0.75% Convertible Senior Notes due 2026. The New Notes offering and Existing Notes repurchase are expected to close concurrently on April 20, 2023, subject to customary closing conditions.

The New Notes will be convertible into cash, shares of common stock of the company, or a combination of cash and shares of common stock at Porch’s election at an initial conversion rate of 39.9956 shares of common stock per $1,000 principal amount of the New Notes, which is equivalent to an initial conversion price of approximately $25.00 per share.

Porch intends to use the net proceeds from the New Notes offering to repurchase $200 million of the Existing Notes and to fund the repayment of a $10 million senior secured term loan of a Porch Group subsidiary, in each case plus accrued and unpaid interest thereon and related fees and expenses, and use the remainder of the net proceeds for general corporate purposes.

Following the closing of this transaction, Porch Group will hold:

• $225 million aggregate principal amount of the unsecured Existing Notes due 2026
• $333 million aggregate principal amount of secured New Notes due 2028

The transaction is additionally expected to result in approximately $100 million of additional cash to Porch Group, net of the debt repayments described above and payment of related fees and expenses.

“This transaction will allow us to reduce our medium-term debt maturity from $425 million to $225 million, while delivering additional liquidity to the business, all while minimizing dilution by maintaining a $25 per share conversion price.” – Shawn Tabak, Porch Group CFO.