Bill Holdings, Inc. (NYSE: BILL) has successfully closed an offering of 0% convertible senior notes due 2030, generating gross proceeds of $1.4 billion. The net proceeds from the offering amount to approximately $1.38 billion after the deduction of initial purchasers' discount and estimated offering expenses.
At the closing of the offering, Bill used a significant portion of the net proceeds for various purposes, including repurchasing its outstanding 0% convertible senior notes due 2025 and 2027. Approximately $130.8 million and $408.6 million of the net proceeds were utilized for repurchasing the 2025 and 2027 notes, respectively. Additionally, $200.0 million of the net proceeds went towards repurchasing 2,260,397 shares of Bill's common stock in privately negotiated transactions.
The remaining net proceeds are intended for general corporate purposes, which may involve additional repurchases of existing notes, repayment of existing notes at maturity, further repurchases of common stock, working capital, capital expenditures, and potential acquisitions and strategic transactions.
The 0% convertible senior notes due 2030 will mature on April 1, 2030, with an initial conversion rate of 8.3718 shares of common stock per $1,000 principal amount of notes. This represents an initial conversion price of approximately $119.45 per share, reflecting a premium of about 35% to the closing price of Bill's common stock on the New York Stock Exchange on December 3, 2024.
Furthermore, in connection with the pricing of the notes, Bill entered into privately negotiated capped call transactions with certain financial institutions to offset potential dilution to the common stock upon any conversion of the notes and/or reduce any excess cash payments required in connection with the converted notes.
The company also repurchased a significant amount of its 2025 and 2027 notes, along with $200.0 million in shares of its common stock from purchasers of notes in the offering in privately negotiated transactions.
This press release does not constitute an offer to sell or a solicitation of an offer to buy any of the notes, the existing notes, or the common stock. The notes and any shares of the common stock issuable upon conversion of the notes have not been registered under the Act or any state securities laws and may not be offered or sold in the United States absent registration or an applicable exemption from such registration requirements. Following these announcements, the company's shares moved 2.0%, and are now trading at a price of $97.41. For more information, read the company's full 8-K submission here.
