The notes will function as senior, unsecured obligations with semi-annual interest payments. Bandwidth plans to use the capital to repurchase a portion of its outstanding 0.50% convertible senior notes maturing in 2028, alongside a $10 million allocation for repurchasing shares of its Class A common stock. Remaining proceeds are earmarked for debt reduction under existing credit facilities and general corporate requirements.
Bandwidth Inc. Plans $275 Million Convertible Debt Offering
Raleigh-based cloud communications firm Bandwidth Inc. announced plans to raise $275 million through a private offering of convertible senior notes due in 2032. The company intends to grant initial purchasers an option for an additional $41.25 million in notes to cover potential over-allotments, targeting qualified institutional buyers.
To manage potential dilution, the company expects to enter into privately negotiated capped call transactions. These agreements are designed to offset cash payments or share issuance requirements exceeding the note principal upon conversion. The company noted that these hedging activities, along with concurrent stock repurchases by current note holders, could influence the market price of its Class A common stock during the offering period.
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