Penguin Solutions to Raise $650 Million through Private Offering

By Ahmed Jamerson • Saturday, July 18 16:02 • Permanent Link

Penguin Solutions said it plans to raise $650 million through a private offering of convertible senior notes due 2031, with an option for buyers to purchase an additional $100 million. The company said the new notes would mature on August 1, 2031, and would be senior unsecured obligations.

At the same time, Penguin expects to exchange a portion of its existing 2.00% convertible senior notes due 2029 and 2030 in privately negotiated deals with a limited number of holders. Those exchanges would involve a mix of cash and shares of Penguin common stock.

The company said it plans to use the proceeds from the new notes to cover the cost of capped call transactions, pay the cash portion of the exchange consideration for the existing notes, and repay $100 million outstanding under its credit agreement. Any remaining proceeds would go toward general corporate purposes.

Penguin said the new financing is intended to help reshape its capital structure. The company also said it may pursue additional exchanges, repurchases, or induced conversions of the existing notes after the offering closes.

The company noted that the offering, if completed, would come alongside hedge activity by noteholders and option counterparties, which could affect trading in Penguin’s shares and notes. The market has reacted to these announcements by moving the company's shares -8.43% to a price of $60.41. For the full picture, make sure to review Penguin Solutions's 8-K report.

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