Bandwidth Raises $250M Via Convertible Senior Notes In Private Institutional Offering

Bandwidth Inc (NASDAQ: BAND) has priced $250 million 0.50% Convertible Senior Notes due 2028 in a private institutional offering to raise $242.3 million.

• The initial purchasers of the Notes have a 13-day option to procure up to an additional $37.5 million Notes.
• Bandwidth would partly utilize the offering proceeds to incur capped call transactions. The remainder of the proceeds would be used for working capital or other general corporate purposes, including capital expenditures and potential acquisitions and strategic transactions.
• The sale of the Notes to the initial purchasers is expected to settle on March 16, 2021. The Notes will be senior, unsecured obligations of Bandwidth, bearing annual interest of 0.50% payable semi-annually in arrears on April 1 and October 1, beginning on October 1, 2021. The Notes will mature on April 1, 2028.
• The notes will be redeemable but only if the last reported sale price per share of Bandwidth’s stock exceeds 130% of the conversion price for a specified period.
• The Notes will be convertible based on an initial conversion rate of 5.5781 shares of Bandwidth’s stock per $1,000 principal amount of Notes equivalent to an initial conversion price of $179.27 per share, signifying a premium of 37.5% to the closing price of $130.38 on March 11, 2021.
• Bandwidth has entered into capped call transactions with certain financial institutions to offset the potential stock dilution from any note conversion. The capped call transactions’ initial cap price is $260.76, representing a 100% premium to the March 11 closing price.
• The company’s convertible senior notes stood at $282.2 million as of December 31, 2020.
• BAND stock has lost 29% in the last month.
• Price action: BAND shares are down 1.44% at $128.50 in the premarket session on the last check Friday.