RALEIGH, N.C., March 10, 2021 /PRNewswire/ -- Bandwidth Inc.
(NASDAQ: BAND) ("Bandwidth"), a leading enterprise cloud
communications company, today announced that it intends to offer
and sell, subject to market and other conditions, $250 million
aggregate principal amount of Convertible Senior Notes due 2028
(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 $37.5 million aggregate principal amount of
the Notes.
The 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.
Bandwidth 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.
In 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 transactions
with the Option Counterparties.
Bandwidth expects that, in connection with establishing their
initial hedges of the capped call transactions, the Option
Counterparties or their respective affiliates expect to purchase
shares of Bandwidth's Class A common stock and/or enter into
various derivative transactions with respect to Bandwidth's Class A
common stock concurrently with or shortly after the pricing of the
Notes. This activity could increase (or reduce the size of any
decrease in) the market price of Bandwidth's Class A common stock
or the Notes at that time. In addition, Bandwidth expects that the
Option Counterparties or their respective affiliates may modify
their hedge positions by entering into or unwinding various
derivatives with respect to the Class A common stock and/or by
purchasing or selling shares of Bandwidth's Class A common stock or
other securities of Bandwidth in secondary market transactions
following the pricing of the Notes and from time to time prior to
the maturity of the Notes (and are likely to do so during any
observation period related to a conversion of the Notes). This
activity could also cause or avoid an increase or a decrease in the
market price of Bandwidth's Class A common stock or the Notes,
which could affect the ability of holders of the Notes to convert
the Notes and, to the extent the activity occurs during any
observation period related to a conversion of the Notes, it could
affect the number of shares of Class A common stock and value of
the consideration that holders of the Notes will receive upon
conversion of the Notes.
The Notes will be offered only to persons reasonably believed to
be qualified institutional buyers pursuant to Rule 144A under the
Securities Act. The offer and sale of the Notes and the shares of
Bandwidth's Class A common stock potentially issuable upon
conversion of the Notes, if any, have not been, and will not be,
registered under the Securities Act or the securities laws of any
other jurisdiction, and unless so registered, the Notes and such
shares, if any, may not be offered or sold in the United States except pursuant to an
applicable exemption from such registration requirements.
Important Information
This press release does not constitute an offer to sell or a
solicitation of an offer to buy, nor shall there be any offer or
sale of, the Notes (or any shares of Bandwidth's Class A common
stock issuable upon conversion of the Notes) in any state or
jurisdiction in which the offer, solicitation or sale would be
unlawful prior to the registration or qualification thereof under
the securities laws of any such state or jurisdiction.
About Bandwidth
Bandwidth (NASDAQ: BAND) is a leading enterprise cloud
communications company. Companies like Cisco, Google, Microsoft,
RingCentral, Uber, and Zoom use Bandwidth's APIs to easily embed
voice, messaging and emergency services into software and
applications. Bandwidth is the first and only CPaaS provider
offering a robust selection of communications APIs built around
their own IP voice network.
Forward-Looking Statements
This press release contains or may imply "forward-looking
statements" within the meaning of Section 27A of the Securities Act
of 1933, as amended, Section 21E of the Securities Exchange Act of
1934 and the Private Securities Litigation Reform Act of 1995.
These forward-looking statements are not based on historical fact
and include, but are not limited to, statements regarding our
future financial and business performance, whether Bandwidth will
be able to consummate the Offering, the terms of the Offering and
the capped call transactions, expectations regarding actions of the
Option Counterparties and their respective affiliates and the
satisfaction of customary closing conditions with respect to the
Offering. Any forward-looking statements are based on management's
current expectations of future events and are subject to a number
of risks and uncertainties that could cause actual results to
differ materially and adversely from those set forth in or implied
by such forward-looking statements. These risks and uncertainties
include, but are not limited to, risks and uncertainties related to
the Offering, including that such transaction may not occur. For a
discussion of other risks and uncertainties, and other important
factors, any of which could cause our actual results to differ from
those contained in the forward-looking statements, see the section
entitled "Risk Factors" in Bandwidth's Form 10-K for the year ended
December 31, 2020, filed with the SEC
and any subsequent reports that we file with the SEC after
December 31, 2020. We caution you
that the foregoing list may not contain all the forward-looking
statements made in this press release. These forward-looking
statements speak only as of the date hereof and Bandwidth
undertakes no obligation to update forward-looking statements, and
readers are cautioned not to place undue reliance on such
forward-looking statements.
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SOURCE Bandwidth Inc.