Adtran Holdings, Inc. (NASDAQ: ADTN) has declared its intention to offer $150,000,000 aggregate principal amount of convertible senior notes due 2030 in a private offering. The company also plans to grant the initial purchaser of the notes an option to buy up to an additional $22,500,000 principal amount of notes. The notes will be senior, unsecured obligations of the company and will accrue interest payable semi-annually in arrears, maturing on September 15, 2030.
Adtran Holdings, Inc. 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 the remainder 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 plans to use a portion of the additional net proceeds to fund the cost of entering into additional capped call transactions as well.
The capped call transactions are anticipated to generally reduce the potential dilution to the company’s 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. However, if the market price per share of the company’s common stock, as measured under the terms of the capped call transactions, exceeds the cap price of the capped call transactions, there would nevertheless be dilution and/or there would not be an offset of such potential cash payments, in each case, to the extent that such market price exceeds the cap price of the capped call transactions.
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. Therefore, the notes and any such shares cannot be offered or sold except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and any other applicable securities laws.
Adtran Holdings, Inc. (NASDAQ: ADTN) is the parent company of Adtran, Inc., a leading global provider of open, disaggregated networking and communications solutions that enable voice, data, video, and internet communications across any network infrastructure. Adtran Holdings, Inc. is also the majority stockholder of Adtran Networks SE, formerly known as Adva Optical Networking SE. As a result of these announcements, the company's shares have moved -0.85% on the market, and are now trading at a price of $8.785. For more information, read the company's full 8-K submission here.
