Akamai Technologies, Inc. has announced its proposal to offer $1.35 billion in aggregate principal amount of convertible senior notes due 2033. The company also plans to grant the initial purchasers of the notes an option to purchase up to an additional $202.5 million in aggregate principal amount of notes. The notes will pay interest semi-annually and are expected to mature on May 15, 2033.
In terms of the usage of the net proceeds from the offering, Akamai plans to use a portion to repay approximately $250.0 million in borrowings outstanding under its five-year senior unsecured revolving credit facility and to repay at maturity a portion of its $1.15 billion outstanding aggregate principal amount of 0.375% convertible senior notes due 2027, and/or to pay cash amounts due upon any earlier conversion thereof. Additionally, the company intends to use a portion of the net proceeds to pay the cost of the convertible note hedge transactions and to repurchase shares of its common stock from purchasers of the notes in privately-negotiated transactions.
The company also outlined a few scenarios where holders may require Akamai to repurchase for cash all or any portion of their notes on May 15, 2031, and in the event of a fundamental change prior to the maturity date of the notes, subject to certain conditions and limited exceptions.
In connection with the pricing of the notes, Akamai expects to enter into convertible note hedge transactions and warrant transactions with the option counterparties to reduce the potential dilution with respect to its common stock upon conversion of the notes and/or to offset any cash payments Akamai is required to make in excess of the principal amount of converted notes.
This press release contains forward-looking information and is being issued pursuant to rule 135c under the securities act. The notes and the common stock issuable upon conversion of the notes have not been and will not be registered under the securities act or any state securities laws and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements. Today the company's shares have moved 3.33% to a price of $78.79. If you want to know more, read the company's complete 8-K report here.
