Bill Holdings, Inc. (NYSE: BILL) has announced the pricing of an upsized offering of $1.25 billion in 0% convertible senior notes due 2030. This offering represents an increase from the previously announced size of $1.0 billion. The net proceeds from the offering are estimated to be approximately $1.23 billion, or $1.38 billion if the initial purchasers exercise their option to purchase additional notes in full.
The company intends to use the proceeds for various purposes, including repurchasing its outstanding convertible senior notes due 2025 and 2027, as well as repurchasing shares of its common stock in privately negotiated transactions. Additionally, a portion of the net proceeds will go towards paying the cost of capped call transactions and for general corporate purposes.
The convertible senior notes will mature on April 1, 2030, and will not bear regular interest. The initial conversion rate for the notes is set at 8.3718 shares of common stock per $1,000 principal amount of notes, equivalent to an initial conversion price of approximately $119.45 per share. This represents a premium of about 35% to the closing price of the company's common stock on December 3, 2024.
In connection with the pricing of the notes, Bill Holdings entered into privately negotiated capped call transactions to offset potential dilution to the common stock upon any conversion of the notes. The company also entered into privately negotiated transactions to repurchase its existing notes and shares of common stock from certain holders.
The press release further states that if the initial purchasers exercise their option to purchase additional notes, the resulting proceeds will be used for entering into additional capped call transactions and for general corporate purposes.
It is important to note that the offering of the notes is not contingent upon the repurchase of the existing notes or the common stock. Additionally, the notes and any shares of the common stock issuable upon conversion of the notes have not been registered under the Securities Act of 1933 or any state securities laws. Today the company's shares have moved 4.0% to a price of $92.02. Check out the company's full 8-K submission here.
