MongoDB Announces Redemption of All of Its Outstanding Convertible Senior Notes due 2026

Rhea-AI Summary

MongoDB (Nasdaq: MDB) has announced the redemption of all outstanding 0.25% convertible senior notes due 2026, totaling $1,149,972,000 in aggregate principal amount. The redemption date is set for December 16, 2024, with the redemption price equal to 100% of the principal amount plus accrued and unpaid interest from July 15, 2024.

Noteholders can convert their notes until 5:00 p.m. (New York City time) on December 13, 2024. The conversion rate is 4.9260 shares of MongoDB common stock per $1,000 principal amount, which includes an increase of 0.1911 shares due to the redemption call. MongoDB will settle conversions during the redemption period by delivering shares of its common stock and cash for any fractional shares.

Positive

• Full redemption of $1,149,972,000 in convertible senior notes, potentially reducing long-term debt
• Conversion option for noteholders, potentially increasing equity and reducing debt obligations
• Increased conversion rate of 4.9260 shares per $1,000 principal, potentially attracting more conversions

Negative

• Potential dilution of existing shareholders if noteholders choose to convert
• Cash outlay required for redemption of non-converted notes and fractional shares

Insights

Financial Analyst

MongoDB's decision to redeem all outstanding convertible senior notes due 2026 is a significant financial move. The $1,149,972,000 redemption at par value indicates strong cash position and confidence in future operations. This action will eliminate a substantial debt obligation, potentially improving the company's balance sheet and reducing interest expenses. The conversion option at 4.9260 shares per $1,000 note (including a 0.1911 share increase) may lead to dilution if many noteholders convert. However, it also presents an opportunity to strengthen the equity structure. The physical settlement choice for conversions suggests MongoDB is comfortable with potential share issuance. This move could be seen as a positive signal about the company's financial health and future prospects, potentially impacting investor sentiment and stock valuation.

Market Research Analyst

MongoDB's redemption of convertible notes could have broader market implications. As a leading database platform provider, this financial maneuver may be interpreted as a sign of strength in the tech sector. The decision to redeem early and offer conversion suggests confidence in the company's stock price trajectory. This move might influence investor perception of MongoDB's growth prospects and competitive position. The tech industry often watches such financial strategies closely, as they can indicate market trends. If successful, this could set a precedent for other tech firms with similar debt structures. Investors should monitor how this affects MongoDB's financial ratios, particularly debt-to-equity and interest coverage. The market's reaction to this news could provide insights into sentiment towards high-growth tech stocks in the current economic climate.

NEW YORK, Oct. 16, 2024 /PRNewswire/ -- MongoDB, Inc. ("MongoDB") (Nasdaq: MDB), the leading, modern general purpose database platform, today announced that it issued a notice of redemption for all $1,149,972,000 aggregate principal amount outstanding of its 0.25% convertible senior notes due 2026 (the "Notes").  The redemption date will be December 16, 2024.  The redemption price with respect to any redeemed note will equal 100% of the principal amount thereof, plus accrued and unpaid interest, from July 15, 2024, to, but excluding the redemption date.  On the redemption date, the redemption price will become due and payable upon each note to be redeemed and interest thereon will cease to accrue on and after the redemption date.

The notes may be converted by holders at any time before 5:00 p.m. (New York City time) on December 13, 2024 (the "conversion deadline").  The conversion rate for notes converted after today and through the conversion deadline is equal to 4.9260  shares of common stock of MongoDB, par value $0.001 per share (the "Common Stock"), per $1,000 principal amount of the notes, which includes an increase to the conversion rate of 0.1911 shares of Common Stock per $1,000 principal amount of the notes as a result of the notes being called for redemption.  MongoDB has elected to settle any conversions of the notes during the redemption period by delivering shares of its Common Stock, together with cash, if applicable, in lieu of delivering any fractional share of Common Stock (physical settlement).

About MongoDB

Headquartered in New York, MongoDB's mission is to empower innovators to create, transform, and disrupt industries by unleashing the power of software and data. Built by developers, for developers, MongoDB's developer data platform is a database with an integrated set of related services that allow development teams to address the growing requirements for today's wide variety of modern applications, all in a unified and consistent user experience. MongoDB has tens of thousands of customers in over 100 countries. The MongoDB database platform has been downloaded hundreds of millions of times since 2007, and there have been millions of builders trained through MongoDB University courses.

Forward Looking Statements

This press release includes certain "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, including statements concerning the planned redemption of the notes. These forward-looking statements include, but are not limited to, plans, objectives, expectations and intentions and other statements contained in this press release that are not historical facts and statements identified by words such as "anticipate," "believe," "continue," "could," "estimate," "expect," "intend," "may," "plan," "project," "will," "would" or the negative or plural of these words or similar expressions or variations. These forward-looking statements reflect our current views about our plans, intentions, expectations, strategies and prospects, which are based on the information currently available to us and on assumptions we have made. Although we believe that our plans, intentions, expectations, strategies and prospects as reflected in or suggested by those forward-looking statements are reasonable, we can give no assurance that the plans, intentions, expectations or strategies will be attained or achieved. Furthermore, actual results may differ materially from those described in the forward-looking statements and are subject to a variety of assumptions, uncertainties, risks and factors that are beyond our control including, without limitation: risks associated with executing the redemption of the notes and events that could impact the terms of the redemption, as well as those described in MongoDB's filings with the United States Securities and Exchange Commission ("SEC"), including under the caption "Risk Factors" in our Quarterly Report on Form 10-Q for the quarter ended July 31, 2024, filed with the SEC on August 30, 2024, and other filings and reports that we may file from time to time with the SEC. Except as required by law, we undertake no duty or obligation to update any forward-looking statements contained in this press release as a result of new information, future events, changes in expectations or otherwise.   

Investor Relations
Brian Denyeau
ICR for MongoDB
646-277-1251
ir@mongodb.com

Media Relations
MongoDB
press@mongodb.com

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SOURCE MongoDB, Inc.

FAQ

What is the redemption date for MongoDB's (MDB) 2026 convertible senior notes?

The redemption date for MongoDB's (MDB) 0.25% convertible senior notes due 2026 is December 16, 2024.

What is the conversion rate for MongoDB's (MDB) 2026 convertible notes during the redemption period?

The conversion rate for MongoDB's (MDB) 2026 convertible notes is 4.9260 shares of common stock per $1,000 principal amount, which includes an increase of 0.1911 shares due to the redemption call.

What is the deadline for converting MongoDB's (MDB) 2026 notes before redemption?

The deadline for converting MongoDB's (MDB) 2026 notes is 5:00 p.m. (New York City time) on December 13, 2024.

How will MongoDB (MDB) settle the conversions of the 2026 notes during the redemption period?

MongoDB (MDB) will settle conversions by delivering shares of its common stock, with cash for any fractional shares.