Palo Alto Networks, Inc. Announces Proposed $1.75 Billion Offering of Convertible Senior Notes Due 2025

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[{"type":"text","content":"SANTA CLARA, Calif., June 3, 2020 /PRNewswire/ -- Palo Alto Networks® (NYSE: PANW) announced today its intention to offer, subject to market conditions and other factors, $1.75 billion aggregate principal amount of convertible senior notes due 2025 (the \"notes\") in a private placement to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the \"Act\"). Palo Alto Networks also expects to grant the initial purchasers of the notes a 30-day option to purchase up to an additional $250 million aggregate principal amount of the notes, to cover over-allotments, if any.\nThe notes will be unsecured, senior obligations of Palo Alto Networks, and interest will be payable semi-annually in arrears. Conversions of the notes will be settled in cash up to the aggregate principal amount of the notes to be converted, and in cash, shares of Palo Alto Networks' common stock (the \"Common Stock\") or a combination thereof, at Palo Alto Networks' election, in respect of the remainder, if any, of Palo Alto Networks' conversion obligation in excess of the aggregate principal amount of the notes being converted. Final terms of the notes, including the interest rate, initial conversion rate and other terms, will be determined by negotiations between Palo Alto Networks and the initial purchasers of the notes.\nIn connection with the offering of the notes, Palo Alto Networks expects to enter into privately negotiated convertible note hedge transactions with certain financial institutions, which may include certain of the initial purchasers or their respective affiliates or other financial institutions (the \"hedge counterparties\"). The convertible note hedge transactions are expected generally to reduce the potential dilution to the Common Stock upon any conversion of notes and/or offset the cash payments Palo Alto Networks is required to make in excess of the principal amount of converted notes, as the case may be, in the event that the market price of the Common Stock is greater than the strike price of the convertible note hedge transactions. Palo Alto Networks also expects to enter into privately negotiated warrant transactions with the hedge counterparties. The warrant transactions could separately have a dilutive effect if the market price of the Common Stock exceeds the strike price of the warrant tr...

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