Business
Bandwidth Announces Proposed Private Offering of $300 Million of Convertible Senior Notes
RALEIGH, N.C., Feb. 25, 2020 /PRNewswire/ -- Bandwidth Inc. (NASDAQ: BAND) ("Bandwidth"), a software company focused on communications for the enterprise,
About this update from Bandwidth Inc.
[{"type":"text","content":"RALEIGH, N.C., Feb. 25, 2020 /PRNewswire/ -- Bandwidth Inc. (NASDAQ: BAND) (\"Bandwidth\"), a software company focused on communications for the enterprise, today announced that it intends to offer and sell, subject to market and other conditions, $300 million aggregate principal amount of Convertible Senior Notes due 2026 (the \"Notes\") in a private offering (the \"Offering\") to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the \"Securities Act\"). Bandwidth also expects to grant the initial purchasers of the Notes a 13-day option to purchase up to an additional $45 million aggregate principal amount of the Notes.\nThe Notes will be senior, unsecured obligations of Bandwidth, and interest will be payable semi-annually in arrears. The Notes will be convertible into cash, shares of Bandwidth's Class A common stock or a combination thereof, at Bandwidth's election. The interest rate, initial conversion rate and other terms of the Notes are to be determined upon pricing of the Offering.\nBandwidth intends to use a portion of the net proceeds from the offering to pay the cost of the capped call transactions described below. Bandwidth intends to use the remainder of the net proceeds for working capital or other general corporate purposes, which may include capital expenditures and potential acquisitions and strategic transactions. However, Bandwidth has not designated any specific uses and has no current agreements with respect to any acquisition or strategic transaction.\nIn connection with the pricing of the Notes, Bandwidth expects to enter into one or more privately negotiated capped call transactions with certain of the initial purchasers of the Notes and/or their respective affiliates and/or other financial institutions (the \"Option Counterparties\"). The capped call transactions are expected generally to reduce the potential dilution to Bandwidth's Class A common stock upon any conversion of the Notes and/or to offset any cash payments Bandwidth is required to make in excess of the principal amount of the converted Notes, as the case may be, upon any conversion of Notes, with such reduction and/or offset subject to a cap. If the initial purchasers of the Notes exercise their option to purchase additional Notes, Bandwidth expects to enter into additional capped call transa...