BILL Announces Repurchase of Additional 0.0% Convertible Senior Notes Due 2025
BILL (NYSE: BILL), a financial operations platform for SMBs, announced the repurchase of approximately $234.5 million in outstanding 0.0% Convertible Senior Notes due 2025.
The repurchase price is around $221.7 million, with the transactions set to close on June 4, 2024, pending customary conditions. Post-repurchase, $167.3 million of these notes will remain outstanding.
The company plans to cancel the repurchased notes, potentially impacting BILL's stock market price.
- Repurchase of $234.5 million in 0.0% Convertible Senior Notes aims to manage debt and improve financial health.
- Repurchase price of $221.7 million indicates a discount, saving the company approximately $12.8 million.
- Reduction in outstanding convertible notes could reduce future dilution risk for shareholders.
- Approximately $167.3 million of the 2025 Notes will remain outstanding, sustaining some debt on the balance sheet.
- Potential market price impact on BILL stock post-repurchase could introduce volatility.
Insights
BILL's repurchase of $234.5 million in 0.0% Convertible Senior Notes due 2025 is a significant move. Let's unpack its financial implications:
Firstly, the company is using approximately $221.7 million in cash to buy back these notes. This indicates a strong cash position or the company’s intention to utilize available liquidity strategically. Reducing outstanding debt often improves balance sheets and may positively affect credit ratings, potentially lowering future borrowing costs.
Secondly, the conversion aspect of these notes should be considered. Convertible notes can be converted into equity, potentially diluting existing shareholders. By repurchasing these notes, BILL is mitigating future dilution, which might appeal to current investors.
Finally, the cancellation of repurchased notes reduces the interest and principal obligations, which could enhance profit margins and earnings per share (EPS) in the short-term. However, investors should be aware that the repurchase might also indicate that the company perceives its stock as undervalued, a point for further consideration.
Rating: 1 (Positive)
The repurchase of Convertible Senior Notes by BILL signals confidence in its financial health and the ability to generate sufficient cash flow. For an investor, this move can be interpreted as a positive indicator of the company's future stability. Reducing debt levels might also make BILL more attractive to institutional investors who often prioritize companies with cleaner balance sheets.
Additionally, the action can impact the market price of BILL's common stock. The announcement can lead to increased investor confidence, potentially driving up the stock price in the short term. However, the actual impact will depend on broader market conditions and investor sentiment toward the company and the sector.
Investors should also consider the long-term strategic implications. By reducing its debt, BILL is positioning itself for potential strategic moves, including acquisitions or reinvestments in its core business areas.
Rating: 1 (Positive)
This press release does not constitute an offer to sell or a solicitation of an offer to buy these securities, nor shall there be any offer or sale of these securities 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 BILL
BILL (NYSE: BILL) is a leading financial operations platform for small and midsize businesses (SMBs). As a champion of SMBs, we are automating the future of finance so businesses can thrive. Our integrated platform helps businesses to more efficiently control their payables, receivables and spend and expense management. Hundreds of thousands of businesses rely on BILL’s proprietary member network of millions to pay or get paid faster. Headquartered in
Note on Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, which are statements other than statements of historical facts, and statements in the future tense. Forward-looking statements are based on our expectations as of the date of this press release and are subject to a number of risks, uncertainties and assumptions, many of which involve factors or circumstances that are beyond our control. These statements include, but are not limited to, statements related to the amount of 2025 Notes to be repurchased, the ability to complete the Repurchases on the timeline described herein or at all, the ultimate cash purchase price for the Repurchases, and the impact of the Repurchases on the market price of BILL common stock. Among the factors that could cause actual results to differ materially from those indicated in the forward-looking statements are: changes in the price of BILL common stock and changes in the convertible note and other capital markets. You should not rely on these forward-looking statements, as actual results may differ materially from those contemplated by these forward-looking statements as a result of such risks and uncertainties. All forward-looking statements in this press release are based on information available to us as of the date hereof. We assume no obligation to update or revise the forward-looking statements contained in this press release because of new information, future events, or otherwise.
View source version on businesswire.com: https://www.businesswire.com/news/home/20240530515989/en/
IR Contact:
Karen Sansot
ksansot@hq.bill.com
Press Contact:
John Welton
john.welton@hq.bill.com
Source: BILL
FAQ
What is the repurchase amount of BILL's Convertible Senior Notes due 2025?
How much is BILL paying for the repurchase of the 2025 Notes?
When is the repurchase of BILL's 2025 Notes expected to close?
How much of the 2025 Notes will remain outstanding after the repurchase?
What could be the effect of the repurchase on BILL's stock price?
