Guidewire Software, Inc. Announces Proposed Convertible Senior Notes Offering
Guidewire Software (NYSE: GWRE) has announced its intention to offer $500 million in convertible senior notes due 2029, with an option for an additional $75 million. The notes will be senior, unsecured obligations with semi-annual interest payments, maturing on November 1, 2029. Noteholders can convert under certain circumstances, with Guidewire settling in cash or a combination of cash and common stock.
The company plans to use the proceeds to fund capped call transactions, retire a portion of its outstanding 1.25% Convertible Senior Notes due March 2025, and for general corporate purposes. The capped call transactions are expected to reduce potential dilution to Guidewire's common stock upon note conversion. This offering is subject to market conditions and will be made to qualified institutional buyers under Rule 144A of the Securities Act.
Guidewire Software (NYSE: GWRE) ha annunciato la sua intenzione di offrire 500 milioni di dollari in note senior convertibili con scadenza nel 2029, con un'opzione per ulteriori 75 milioni di dollari. Le note saranno obbligazioni senior non garantite con pagamenti di interessi semestrali, in scadenza il 1° novembre 2029. I detentori delle note possono convertirle in determinate circostanze, con Guidewire che liquida in contante o in una combinazione di contante e azioni ordinarie.
L'azienda intende utilizzare i proventi per finanziare transazioni di capped call, ritirare una parte delle sue note senior convertibili a 1,25% in scadenza a marzo 2025 e per scopi aziendali generali. Le transazioni di capped call dovrebbero ridurre la potenziale diluizione delle azioni ordinarie di Guidewire in caso di conversione delle note. Questa offerta è soggetta a condizioni di mercato e sarà fatta a compratori istituzionali qualificati ai sensi della Regola 144A del Securities Act.
Guidewire Software (NYSE: GWRE) ha anunciado su intención de ofrecer 500 millones de dólares en notas senior convertibles con vencimiento en 2029, con una opción para un adicional 75 millones de dólares. Las notas serán obligaciones senior no garantizadas con pagos de intereses semestrales, que vencerán el 1 de noviembre de 2029. Los tenedores de notas podrán convertirlas en ciertas circunstancias, con Guidewire liquidando en efectivo o en una combinación de efectivo y acciones ordinarias.
La compañía planea utilizar los ingresos para financiar transacciones de capped call, retirar una parte de sus notas senior convertibles al 1,25% con vencimiento en marzo de 2025 y para fines corporativos generales. Se espera que las transacciones de capped call reduzcan la posible dilución de las acciones ordinarias de Guidewire al momento de la conversión de las notas. Esta oferta está sujeta a condiciones de mercado y se realizará a compradores institucionales calificados bajo la Regla 144A de la Ley de Valores.
Guidewire Software (NYSE: GWRE)는 2029년 만기 convertible senior notes를 5억 달러 규모로 발행할 계획을 발표했으며, 추가 7천5백만 달러의 선택권도 제공합니다. 이 채권은 반기별 이자 지급이 있는 비담보 고위 채무로, 2029년 11월 1일에 만기가 됩니다. 채권 보유자는 특정 상황에서 변환할 수 있으며, Guidewire는 현금 또는 현금과 보통주 결합으로 결제할 수 있습니다.
회사는 수익금을 capped call 거래에 사용하고, 2025년 3월 만기 1.25% convertible senior notes의 일부를 상환하며, 일반 기업 목적을 위해 사용 계획입니다. capped call 거래는 채권 변환 시 Guidewire의 보통주에 대한 잠재적 희석을 줄일 것으로 예상됩니다. 이번 발행은 시장 조건에 따라 달라지며, 증권법의 규칙 144A에 따라 자격을 갖춘 기관 투자자에게 제공될 것입니다.
Guidewire Software (NYSE: GWRE) a annoncé son intention de proposer 500 millions de dollars en obligations senior convertibles arrivant à échéance en 2029, avec une option pour un montant supplémentaire de 75 millions de dollars. Les obligations seront des engagements seniors non garantis avec des paiements d'intérêts semestriels, arrivant à échéance le 1er novembre 2029. Les détenteurs d'obligations pourront convertir sous certaines conditions, Guidewire réglant en espèces ou dans une combinaison de liquidités et d'actions ordinaires.
L'entreprise prévoit d'utiliser les produits pour financer des transactions de capped call, racheter une partie de ses obligations senior convertibles à 1,25% arrivant à échéance en mars 2025, et pour des fins corporatives générales. Les transactions de capped call devraient réduire la dilution potentielle des actions ordinaires de Guidewire lors de la conversion des obligations. Cette offre est soumise aux conditions du marché et sera faite à des acheteurs institutionnels qualifiés en vertu de la règle 144A de la loi sur les valeurs mobilières.
Guidewire Software (NYSE: GWRE) hat bekannt gegeben, dass es plant, 500 Millionen US-Dollar in wandelbaren vorrangigen Anleihen mit Fälligkeit im Jahr 2029 anzubieten, mit einer Option auf zusätzliche 75 Millionen US-Dollar. Die Anleihen werden ungesicherte vorrangige Verbindlichkeiten mit halbjährlichen Zinsszahlungen sein und verfallen am 1. November 2029. Anleiheinhaber können unter bestimmten Umständen umwandeln, wobei Guidewire in bar oder in einer Kombination aus Bar und Stammaktien abwickeln kann.
Das Unternehmen plant, die Einnahmen zur Finanzierung von capped call-Transaktionen zu verwenden, einen Teil seiner ausstehenden 1,25%-wandelbaren vorrangigen Anleihen mit Fälligkeit im März 2025 zu tilgen und für allgemeine Unternehmenszwecke. Die capped call-Transaktionen werden voraussichtlich eine mögliche Verwässerung der Stammaktien von Guidewire bei der Umwandlung der Anleihen reduzieren. Dieses Angebot unterliegt den Marktbedingungen und wird an qualifizierte institutionelle Käufer gemäß Regel 144A des Wertpapiergesetzes angeboten.
- Potential to raise up to $575 million in capital through convertible notes offering
- Implementation of capped call transactions to reduce potential dilution to common stock
- Opportunity to retire a portion of existing 2025 convertible notes
- Increase in long-term debt obligations
- Potential dilution of existing shareholders if notes are converted to common stock
- Additional interest expenses may impact future financial results
Insights
Guidewire's proposed
- The offering provides substantial capital for Guidewire, potentially strengthening its balance sheet and providing funds for growth initiatives or debt refinancing.
- The company plans to use part of the proceeds to retire a portion of its
1.25% Convertible Senior Notes due 2025, which could help manage its debt maturity profile. - The capped call transactions associated with the offering are designed to reduce potential dilution from the new notes, showing management's attention to existing shareholders' interests.
- However, the conversion feature of the notes and related market activities could impact Guidewire's stock price in the short term, potentially increasing volatility.
Overall, this offering provides Guidewire with financial flexibility but also introduces new considerations for investors regarding potential dilution and market dynamics.
This convertible notes offering by Guidewire could have several market implications:
- The
$500 million size of the offering is substantial relative to Guidewire's$15.5 billion market cap, indicating a significant capital raise. - The retirement of 2025 Notes may lead to increased trading volume and potential price fluctuations in Guidewire's stock as note holders adjust their positions.
- The capped call transactions could create a ceiling for potential stock price appreciation, which investors should consider when evaluating the company's upside potential.
- The offering's success and pricing will provide insights into investor confidence in Guidewire's long-term prospects and the broader market's appetite for convertible securities in the current interest rate environment.
Investors should monitor the pricing details and market reaction to gauge the offering's impact on Guidewire's valuation and future capital structure.
The notes will be senior, unsecured obligations of Guidewire, will accrue interest payable semi-annually in arrears and will mature on November 1, 2029, unless earlier repurchased, redeemed or converted. Noteholders will have the right to convert their notes in certain circumstances and during specified periods. Guidewire will settle conversions in cash or a combination of cash and shares of its common stock, at Guidewire’s election.
The notes will be redeemable, in whole or in part (subject to certain limitations), for cash at Guidewire’s option at any time, and from time to time, on or after November 5, 2027 and on or before the 20th scheduled trading day immediately before the maturity date, but only if the last reported sale price per share of Guidewire’s common stock exceeds
If certain corporate events that constitute a “fundamental change” occur, then, subject to a limited exception, noteholders may require Guidewire to repurchase their notes for cash. The repurchase price will be equal to the principal amount of the notes to be repurchased, plus accrued and unpaid interest, if any, to, but excluding, the applicable repurchase date.
The interest rate, initial conversion rate and other terms of the notes will be determined at the pricing of the offering.
Guidewire intends to use a portion of the net proceeds from the offering to fund the cost of entering into the capped call transactions described below. Guidewire intends to use a portion of the net proceeds from the offering to retire a portion of its outstanding
In connection with the retirement of a portion of the 2025 Notes, Guidewire expects some or all of the holders of the 2025 Notes that Guidewire will retire may enter into or unwind various derivatives with respect to Guidewire’s common stock and/or purchase shares of Guidewire’s common stock concurrently with or shortly after the pricing of the notes. In particular, Guidewire expects that many holders of the 2025 Notes employ a convertible arbitrage strategy with respect to the 2025 Notes and have a short position with respect to Guidewire’s common stock that they would close out through purchases of Guidewire’s common stock and/or the unwinding of various derivatives with respect to Guidewire’s common stock, as the case may be, in connection with Guidewire’s retirement of the 2025 Notes. The retirement of the 2025 Notes, and the potential related market activities by selling holders of the 2025 Notes (such as purchases of shares of Guidewire’s common stock that Guidewire expects to occur in connection with the retirement transactions), could increase (or reduce the size of any decrease in) the market price of Guidewire’s common stock, which may also affect the trading price of the notes at that time. This activity could affect the market price of Guidewire’s common stock concurrently with the pricing of the notes, and could result in a higher effective conversion price for the notes Guidewire is offering.
In connection with the pricing of the notes, Guidewire expects to enter into privately negotiated capped call transactions with one or more of the initial purchasers or their affiliates and/or one or more other financial institutions (the “option counterparties”). The capped call transactions are expected to cover, subject to anti-dilution adjustments substantially similar to those applicable to the notes, the number of shares of Guidewire’s common stock that will initially underlie the notes. If the initial purchasers exercise their option to purchase additional notes, then Guidewire expects to enter into additional capped call transactions with the option counterparties.
The capped call transactions are expected generally to reduce the potential dilution to Guidewire’s common stock upon any conversion of the notes and/or offset any potential cash payments Guidewire is required to make in excess of the principal amount of converted notes, as the case may be. If, however, the market price per share of Guidewire’s common stock, as measured under the terms of the capped call transactions, exceeds the cap price of the capped call transactions, there would nevertheless be dilution and/or there would not be an offset of such potential cash payments, in each case, to the extent that such market price exceeds the cap price of the capped call transactions.
In connection with establishing their initial hedges of the capped call transactions, the option counterparties or their respective affiliates expect to enter into various derivative transactions with respect to Guidewire’s common stock and/or purchase shares of Guidewire’s 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 Guidewire’s common stock or the market value of the notes at that time.
In addition, the option counterparties or their respective affiliates may modify their hedge positions by entering into or unwinding various derivatives with respect to Guidewire’s common stock and/or purchasing or selling Guidewire’s common stock or other securities of Guidewire in secondary market transactions following the pricing of the notes and prior to the maturity of the notes (and (x) are likely to do so during any observation period related to a conversion of notes or following any repurchase of the notes by Guidewire in connection with any redemption or fundamental change and (y) are likely to do so following any repurchase of the notes by Guidewire other than in connection with any redemption or fundamental change if Guidewire elects to unwind a corresponding portion of the capped call transactions in connection with such repurchase). This activity could also cause or avoid an increase or decrease in the market price of Guidewire’s common stock or the notes, which could affect noteholders’ ability to convert the notes and, to the extent the activity occurs during any observation period related to a conversion of notes, it could affect the amount and value of the consideration that noteholders will receive upon conversion of the notes.
The offer and sale of the notes and any shares of common stock issuable upon conversion of the notes have not been, and will not be, registered under the Securities Act or any other securities laws, and the notes and any such shares cannot be offered or sold except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and any other applicable securities laws. This press release does not constitute an offer to sell, or the solicitation of an offer to buy, the notes or any shares of common stock issuable upon conversion of the notes, nor will there be any sale of the notes or any such shares, in any state or other jurisdiction in which such offer, sale or solicitation would be unlawful.
About Guidewire
Guidewire is the platform P&C insurers trust to engage, innovate, and grow efficiently. More than 570 insurance brands in 42 countries, from new ventures to the largest and most complex in the world, rely on Guidewire products. With core systems leveraging data and analytics, digital, and artificial intelligence, Guidewire defines cloud platform excellence for P&C insurers.
Forward-Looking Statements
This press release includes “forward-looking statements” within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, including but not limited to, statements regarding the anticipated terms of the notes being offered, the completion, timing and size of the proposed offering of the notes and the retirement of any 2025 Notes, the intended use of the proceeds and the anticipated terms of, and the effects of entering into, the capped call transactions and the retirement of 2025 Notes described above. Words such as “expect,” “anticipate,” “should,” “believe,” “hope,” “target,” “project,” “goals,” “estimate,” “potential,” “predict,” “may,” “will,” “might,” “could,” “intend,” variations of these terms or the negative of these terms and similar expressions are intended to identify these forward-looking statements. Forward-looking statements represent Guidewire’s current expectations regarding future events and are subject to known and unknown risks and uncertainties that could cause actual results to differ materially from those implied by the forward-looking statements. Among those risks and uncertainties are market conditions, including market interest rates, the trading price and volatility of Guidewire’s common stock and risks relating to Guidewire’s business, including those described in Guidewire’s most recent Form 10-K filed with the Securities and Exchange Commission (the “SEC”) as well as other documents that may be filed by Guidewire from time to time with the SEC. Guidewire may not consummate the proposed offering described in this press release and, if the proposed offering is consummated, cannot provide any assurances regarding the final terms of the offering or the notes or its ability to effectively apply the net proceeds as described above. The forward-looking statements included in this press release speak only as of the date of this press release, and Guidewire does not undertake to update the statements included in this press release for subsequent developments, except as may be required by law.
View source version on businesswire.com: https://www.businesswire.com/news/home/20241014564840/en/
Investor Contact:
Alex Hughes
+1 (650) 356-4921
ir@guidewire.com
Media Contact:
Melissa
+1 (650) 464-1177
mcobb@guidewire.co
Source: Guidewire Software, Inc.
FAQ
What is the purpose of Guidewire Software's (GWRE) proposed convertible notes offering?
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