J2 Global Announces Pricing of $750,000,000 Offering of Senior Notes

Rhea-AI Summary

J2 Global (NASDAQGS:JCOM) has announced the pricing of $750 million in 4.625% senior notes due 2030. The offering is set to close on October 7, 2020, under exemptions from the Securities Act. The notes will bear interest payable semi-annually, starting April 15, 2021, and will be secured by certain subsidiaries. J2 Global intends to use proceeds to redeem existing 6.0% senior notes due 2025 and terminate its current secured credit facility, with plans to establish a new one. Remaining funds will go toward general corporate purposes, acquisitions or further debt management.

Positive

• Issuance of $750 million in senior notes enhances liquidity.
• Redeeming higher interest 6.0% notes reduces future interest expenses.
• Plans for a new secured credit facility may improve financial flexibility.

Negative

• Potential shareholder dilution from additional debt.
• Risks associated with dependency on favorable market conditions for new credit.

LOS ANGELES--(BUSINESS WIRE)--J2 Global, Inc. (NASDAQGS:JCOM) (“J2 Global”) today announced the pricing of $750,000,000 aggregate principal amount of its 4.625% senior notes due 2030 in a private offering exempt from registration under the Securities Act of 1933, as amended (the “Securities Act”). The offering of the notes is expected to close on October 7, 2020, subject to customary closing conditions.

The notes will be senior unsecured obligations of J2 Global and bear interest at a rate of 4.625% per year, payable semi-annually in arrears on April 15 and October 15 of each year, beginning on April 15, 2021, and are to be guaranteed on an unsecured basis by certain of J2 Global’s existing and future domestic subsidiaries. The notes will mature on October 15, 2030, unless earlier redeemed or repurchased.

J2 Global expects to use a portion of the net proceeds from the offering of the notes to redeem the existing $650 million aggregate principal amount of 6.0% senior notes due 2025 of J2 Global’s wholly-owned subsidiaries, j2 Cloud Services, LLC and j2 Cloud Co-Obligor, Inc. In addition, the credit agreement, dated as of January 7, 2019, by and among j2 Cloud Services, LLC, the lenders from time to time party thereto and MUFG Union Bank N.A. (the senior secured credit facility) will be terminated in full in connection with the offering of the notes. J2 Global intends to enter into a new senior secured credit facility in the near term. J2 Global expects to use the remainder of the net proceeds from the offering for general corporate purposes, which may include acquisitions and the repurchase or redemption of other outstanding indebtedness.

Neither the notes, nor the related guarantees, have been nor will be registered under the Securities Act or any state securities laws, and may not be offered or sold in the United States except pursuant to an applicable exemption from the registration requirements. The notes and the related guarantees were offered only to persons reasonably believed to be qualified institutional buyers in reliance on Rule 144A under the Securities Act, and outside the United States only to non-U.S. persons pursuant to Regulation S.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy any security and shall not constitute an offer, solicitation or sale in any jurisdiction in which such offer, solicitation or sale would be unlawful. This press release does not constitute a notice of redemption of the 6.0% senior notes due 2025 of J2 Global’s wholly-owned subsidiaries, j2 Cloud Services, LLC and j2 Cloud Co-Obligor, Inc.

“Safe Harbor” Statement Under the Private Securities Litigation Reform Act of 1995

Certain statements in this Press Release are “forward-looking statements” within the meaning of The Private Securities Litigation Reform Act of 1995 with respect to the senior notes offering. These forward-looking statements are subject to numerous assumptions, risks and uncertainties, including market and other conditions and, with respect to the proposed use of proceeds, the availability of acquisition targets on acceptable terms or at all and J2 Global’s ability to enter into a new senior secured credit facility. There are important factors that could cause our actual results, level of activity, performance or achievements to differ materially from the results, level of activity, performance or achievements expressed or implied by the forward-looking statements, including those factors described in J2 Global’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and other documents filed from time to time by J2 Global with the SEC. Although management’s expectations may change after the date of this press release, J2 Global undertakes no obligation to revise or update these statements.