Adtran Holdings, Inc. (NASDAQ: ADTN) recently announced its intention to offer $150,000,000 aggregate principal amount of convertible senior notes due 2030 in a private offering. The company also expects to grant the initial purchaser of the notes an option to purchase up to an additional $22,500,000 principal amount of notes.
The notes will accrue interest payable semi-annually in arrears and will mature on September 15, 2030, unless earlier repurchased, redeemed, or converted. Noteholders will have the right to convert their notes in certain circumstances and during specified periods. The notes will also be redeemable, in whole or in part, for cash at the company’s option at any time on or after September 20, 2028.
Adtran intends to use a portion of the net proceeds from the offering of the notes to fund the cost of entering into capped call transactions and to repay a portion of outstanding borrowings under its credit agreement dated July 18, 2022. If the initial purchaser exercises its option to purchase additional notes, the company intends to use a portion of the additional net proceeds to fund the cost of entering into additional capped call transactions and the remainder to repay additional borrowings under the credit agreement.
The company expects that the capped call transactions will generally reduce the potential dilution to its common stock upon any conversion of the notes and/or offset any potential cash payments the company is required to make in excess of the principal amount of converted notes, as the case may be, upon conversion of the notes.
The offer and sale of the notes and any shares of common stock issuable upon conversion of the notes have not been, and will not be, registered under the securities act or any other securities laws.
Adtran Holdings, Inc. is the parent company of Adtran, Inc., a leading global provider of open, disaggregated networking and communications solutions. Adtran empowers communications service providers around the world to manage and scale services that connect people, places, and things. Today the company's shares have moved -15.13% to a price of $8.86. Check out the company's full 8-K submission here.
