Bill.com to Offer $750.0 Million of Convertible Senior Notes due 2025
Bill.com Holdings has announced plans to offer $750 million in convertible senior notes due 2025. This private placement aims to qualified institutional buyers and includes an option for initial purchasers to buy an additional $112.5 million. The notes are unsecured, with semiannual interest payments. Proceeds will fund capped call transactions and general corporate purposes, including potential acquisitions. The conversion option allows for settlement in cash, stock, or a combination. The offering is subject to market conditions and does not constitute a solicitation for these securities.
- Proposed offering of $750 million in convertible senior notes to strengthen capital structure.
- Potential use of proceeds for acquisitions and strategic investments could enhance growth.
- Capped call transactions aim to reduce stock dilution upon conversion of notes.
- Risks inherent in the offering, such as market conditions impacting the success of the notes.
- Dependence on certain conditions for conversion rights could limit investors' flexibility.
- Uncertainty surrounding the actual use of proceeds amidst market volatility.
PALO ALTO, Calif.--(BUSINESS WIRE)--Bill.com Holdings, Inc. (NYSE: BILL) (“Bill.com”) today announced that it proposes to offer
The notes will be senior, unsecured obligations of Bill.com, and interest will be payable semiannually in arrears.
The notes will mature on December 1, 2025, unless earlier converted, redeemed or repurchased in accordance with the terms of the notes. Prior to 5:00 p.m., New York City time, on the business day immediately preceding September 1, 2025, the notes will be convertible at the option of holders only upon satisfaction of certain conditions and during certain periods, and thereafter, at any time until 5:00 p.m., New York City time, on the second scheduled trading day immediately preceding the maturity date. Upon conversion, the notes may be settled in shares of Bill.com’s common stock (the “common stock”), cash or a combination of cash and shares of common stock, at the election of Bill.com.
Holders of the notes will have the right to require Bill.com to repurchase for cash all or a portion of their notes at
The interest rate, conversion rate, offering price and other terms are to be determined upon pricing of the notes.
Bill.com intends to use a portion of the net proceeds to pay the cost of the capped call transactions described below. Bill.com intends to use the remaining net proceeds for general corporate purposes, which may include working capital, capital expenditures and potential acquisitions and strategic transactions. From time to time, Bill.com evaluates potential acquisitions and strategic transactions involving businesses, technologies or products. However, Bill.com has not designated any specific uses and has no current agreements with respect to any acquisitions or strategic transactions.
In connection with the pricing of the notes, Bill.com expects to enter into capped call transactions with one or more of the initial purchasers 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 the common stock upon any conversion of the notes and/or offset any cash payments Bill.com is required to make in excess of the principal amount of converted notes, as the case may be, with such reduction and/or offset subject to a cap. If the initial purchasers exercise their option to purchase additional notes, Bill.com expects to enter into additional capped call transactions with the option counterparties.
In connection with establishing their initial hedges of the capped call transactions, the option counterparties and/or their respective affiliates expect to purchase shares of the common stock and/or enter into various derivative transactions with respect to the 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 the common stock or the notes at that time.
In addition, the option counterparties and/or their respective affiliates may modify their hedge positions by entering into or unwinding various derivatives with respect to the common stock and/or purchasing or selling the common stock in secondary market transactions following the pricing of the notes and prior to the maturity of the notes (and are likely to do so during any observation period related to a conversion of notes/may do so following any repurchase of notes by Bill.com on any fundamental change repurchase date or otherwise). This activity could also cause or avoid an increase or a decrease in the market price of the common stock or the notes, which could affect the holder’s ability 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 and the value of the consideration that the holder would receive upon conversion of the notes.
If the initial purchasers exercise their option to purchase additional notes, Bill.com may use the resulting additional proceeds of the sale of the additional notes to pay the cost of entering into the additional capped call transactions and for general corporate purposes, which may include working capital, capital expenditures and potential acquisitions and strategic transactions. From time to time, Bill.com evaluates potential acquisitions and strategic transactions involving businesses, technologies or products. However, Bill.com has not designated any specific uses and has no current agreements with respect to any acquisitions or strategic transactions.
This announcement is neither an offer to sell nor a solicitation of an offer to buy any of these securities (including the shares of the common stock, if any, into which the notes are convertible) and shall not constitute an offer, solicitation or sale in any jurisdiction in which such offer, solicitation or sale is unlawful. Any offers of the notes will be made only by means of a private offering memorandum.
The notes and any shares of the common stock issuable upon conversion of the notes have not been registered under the Act, or any state securities laws and may not be offered or sold in the United States absent registration or an applicable exemption from such registration requirements.
Cautionary Statement Regarding Forward-Looking Statements
This press release may include forward-looking statements within the meaning of Section 27A of the Private Securities Litigation Reform Act. Words such as "anticipate," "believe," "estimate," "expect," "intend," "should," "will" and variations of these terms or the negative of these terms and similar expressions are intended to identify these forward-looking statements. Forward-looking statements in this press release may include but are not limited to statements regarding Bill.com’s proposed offering of the notes and expected use of net proceeds of the offering. Factors that may contribute to such differences include, but are not limited to, risks related to whether Bill.com will consummate the offering of the notes on the expected terms, or at all, the anticipated principal amount of the notes, which could differ based upon market conditions, whether the capped call transactions will become effective, the expected use of the net proceeds from the offering, which could change as a result of market conditions or for other reasons, prevailing market and other general economic, industry or political conditions in the United States or internationally, the impact of COVID-19, and whether Bill.com will be able to satisfy the conditions required to close any sale of the notes. The foregoing list of risks and uncertainties is illustrative, but is not exhaustive. For information about other potential factors that could affect Bill.com’s business and financial results, please review the “Risk Factors” described in Bill.com’s Annual Report on Form 10-K for the fiscal year ended June 30, 2020 and Bill.com’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2020 filed with the Securities and Exchange Commission (the “SEC”) and in Bill.com’s other filings with the SEC. These forward-looking statements speak only as of the date hereof or as of the date otherwise stated herein. Bill.com disclaims any obligation to update these forward-looking statements.
