Supermicro Announces Pricing of Private Placement of $700.0 Million of New 2.25% Convertible Senior Notes Due 2028 and Pricing of Amended Convertible Senior Notes Due 2029
Super Micro Computer (SMCI) has announced the pricing of $700.0 million of new 2.25% Convertible Senior Notes due 2028 and amended terms for existing $1.725 billion Convertible Notes due 2029. The new notes will have an initial conversion rate of 16.3784 shares per $1,000 principal amount, equivalent to a conversion price of $61.06 per share, representing a 50% premium over the reference price of $40.7040.
The amended existing notes will bear a 3.50% annual interest rate and have a conversion rate of 11.9842 shares per $1,000, equivalent to $83.44 per share, representing a 105% premium over the reference price. Both transactions are expected to close around February 20, 2025. The company plans to use the proceeds for general corporate purposes, including working capital for growth and business expansion.
Super Micro Computer (SMCI) ha annunciato il prezzo di 700,0 milioni di dollari di nuovi Convertible Senior Notes con un tasso del 2,25% in scadenza nel 2028 e ha modificato i termini per i Convertible Notes esistenti da 1,725 miliardi di dollari in scadenza nel 2029. I nuovi titoli avranno un tasso di conversione iniziale di 16,3784 azioni per ogni 1.000 dollari di valore nominale, equivalente a un prezzo di conversione di 61,06 dollari per azione, che rappresenta un premio del 50% rispetto al prezzo di riferimento di 40,7040 dollari.
I titoli esistenti modificati avranno un tasso d'interesse annuale del 3,50% e un tasso di conversione di 11,9842 azioni per 1.000 dollari, equivalente a 83,44 dollari per azione, rappresentando un premio del 105% rispetto al prezzo di riferimento. Entrambe le transazioni dovrebbero chiudersi intorno al 20 febbraio 2025. L'azienda prevede di utilizzare i proventi per scopi aziendali generali, inclusi i capitali di lavoro per la crescita e l'espansione aziendale.
Super Micro Computer (SMCI) ha anunciado el precio de 700,0 millones de dólares de nuevos Convertible Senior Notes al 2,25% con vencimiento en 2028 y ha modificado los términos de los Convertible Notes existentes de 1,725 mil millones de dólares que vencen en 2029. Los nuevos bonos tendrán una tasa de conversión inicial de 16,3784 acciones por cada 1,000 dólares de monto principal, equivalente a un precio de conversión de 61,06 dólares por acción, lo que representa una prima del 50% sobre el precio de referencia de 40,7040 dólares.
Los bonos existentes enmendados tendrán una tasa de interés anual del 3,50% y una tasa de conversión de 11,9842 acciones por 1,000 dólares, equivalente a 83,44 dólares por acción, lo que representa una prima del 105% sobre el precio de referencia. Se espera que ambas transacciones se cierren alrededor del 20 de febrero de 2025. La compañía planea utilizar los ingresos para fines corporativos generales, incluidos el capital de trabajo para el crecimiento y la expansión del negocio.
슈퍼 마이크로 컴퓨터 (SMCI)가 2028년 만기 신규 2.25% 전환 상환 채권 7억 달러의 가격을 발표했으며, 2029년 만기 기존 전환 채권 17억 2500만 달러의 조건을 수정했습니다. 신규 채권은 1,000달러의 원금에 대해 16.3784주로 초기 전환 비율을 설정하며, 이는 주당 61.06달러의 전환 가격에 해당하며, 기준 가격 40.7040달러에 비해 50%의 프리미엄을 나타냅니다.
수정된 기존 채권은 연 3.50%의 이자율을 가지며 1,000달러당 11.9842주의 전환 비율을 가지며, 이는 주당 83.44달러에 해당하며, 기준 가격에 비해 105%의 프리미엄을 나타냅니다. 두 거래 모두 2025년 2월 20일경 마감될 것으로 예상됩니다. 회사는 자금을 일반 기업 목적, 성장 및 사업 확장을 위한 운영 자본에 사용할 계획입니다.
Super Micro Computer (SMCI) a annoncé le prix de 700,0 millions de dollars de nouvelles Convertible Senior Notes à 2,25% arrivant à échéance en 2028 et a modifié les termes des Convertible Notes existantes de 1,725 milliard de dollars arrivant à échéance en 2029. Les nouvelles obligations auront un taux de conversion initial de 16,3784 actions pour 1 000 dollars de montant principal, ce qui équivaut à un prix de conversion de 61,06 dollars par action, représentant une prime de 50% par rapport au prix de référence de 40,7040 dollars.
Les obligations existantes modifiées porteront un taux d'intérêt annuel de 3,50% et auront un taux de conversion de 11,9842 actions pour 1 000 dollars, équivalent à 83,44 dollars par action, représentant une prime de 105% par rapport au prix de référence. Les deux transactions devraient se clôturer vers le 20 février 2025. La société prévoit d'utiliser les produits pour des fins corporatives générales, y compris le fonds de roulement pour la croissance et l'expansion des affaires.
Super Micro Computer (SMCI) hat die Preisgestaltung für neue Convertible Senior Notes in Höhe von 700,0 Millionen Dollar mit einem Zinssatz von 2,25% und einer Fälligkeit im Jahr 2028 angekündigt und die Bedingungen für bestehende Convertible Notes in Höhe von 1,725 Milliarden Dollar mit einer Fälligkeit im Jahr 2029 geändert. Die neuen Anleihen haben einen anfänglichen Umwandlungsverhältnis von 16,3784 Aktien pro 1.000 Dollar Nennbetrag, was einem Umwandlungspreis von 61,06 Dollar pro Aktie entspricht und eine Prämie von 50% über dem Referenzpreis von 40,7040 Dollar darstellt.
Die geänderten bestehenden Anleihen werden einen jährlichen Zinssatz von 3,50% tragen und ein Umwandlungsverhältnis von 11,9842 Aktien pro 1.000 Dollar haben, was 83,44 Dollar pro Aktie entspricht und eine Prämie von 105% über dem Referenzpreis darstellt. Beide Transaktionen sollen voraussichtlich um den 20. Februar 2025 abgeschlossen werden. Das Unternehmen plant, die Erlöse für allgemeine Unternehmenszwecke zu verwenden, einschließlich Betriebskapital für Wachstum und Geschäftserweiterung.
- Secured $700 million in new financing through convertible notes
- Proceeds will fund working capital for growth and business expansion
- Successfully amended terms of existing $1.725 billion convertible notes
- Potential dilution for existing shareholders upon conversion of notes
- Increased interest expense with 2.25% rate on new notes and 3.50% on amended notes
- Additional debt obligations could impact financial flexibility
Insights
This sophisticated $700 million convertible note offering, combined with the amendment of $1.725 billion in existing notes, represents a strategic financing maneuver that merits careful analysis. The structure reveals several key insights:
The dual-tranche approach, with different conversion premiums (50% for new notes, 105% for amended notes) and interest rates (2.25% and 3.50% respectively), demonstrates sophisticated financial engineering. The higher premium on amended notes provides greater upside protection for existing holders while rewarding them with a higher interest rate, while new notes offer more attractive conversion terms to entice fresh capital.
The inclusion of capped call transactions is particularly noteworthy, as it helps mitigate potential dilution concerns. This hedging strategy allows Supermicro to offer attractive conversion terms while protecting existing shareholders - a important consideration given the company's recent stock performance and growth trajectory.
The timing and structure of this financing suggest three strategic priorities:
- Building war chest for growth initiatives, particularly important in the current AI infrastructure boom
- Optimizing capital structure by securing relatively low-cost financing despite market volatility
- Maintaining financial flexibility through conversion features while protecting against excessive dilution
The 2.25% interest rate on new notes is particularly competitive in the current rate environment, indicating strong market confidence in Supermicro's business model and growth prospects. The company's ability to secure these terms while maintaining significant conversion premiums suggests robust institutional demand for exposure to the AI infrastructure sector.
The use of proceeds for "general corporate purposes" and working capital signals potential aggressive expansion plans, important for maintaining Supermicro's competitive position in the rapidly evolving AI server market. This financing provides substantial dry powder for strategic initiatives while maintaining balance sheet flexibility.
Goldman Sachs & Co. LLC and Evercore Group L.L.C. acted as both placement agents for the offering of the New Convertible Notes and financial advisors to the Company in connection with the transactions. ICR Capital LLC acted as financial advisor to the Company in connection with the transactions.
The New Convertible Notes
The New Convertible Notes will be senior, unsecured obligations of the Company and will bear interest at an annual rate of
The New Convertible Notes will be redeemable, in whole or in part (subject to certain limitations), for cash at the Company’s option at any time, and from time to time, on or after March 1, 2026 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 the Company’s common stock exceeds
Holders of the New Convertible Notes will have the right to require the Company to repurchase all or a portion of their New Convertible Notes upon the occurrence of a fundamental change (as defined in the indenture governing the New Convertible Notes) at a cash repurchase price of
The New Convertible Notes are being sold only to investors who are (i) “institutional accounts” as defined in FINRA Rule 4512(c), (ii) institutional “accredited investors” as defined in Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act of 1933, as amended (the “Securities Act”), and (iii) “qualified institutional buyers” as defined in Rule 144A under the Securities Act.
The Amended Convertible Notes
The Amended Convertible Notes will bear interest from the effective date of the Amendments at an annual rate of
In connection with the Amendments and the Subscription, the Company expects some or all of the holders of the Amended Convertible Notes and/or the New Convertible Notes may enter into or unwind various derivatives with respect to the Company’s common stock and/or purchase or sell shares of the Company’s common stock concurrently with or shortly after the determination of the amended conversion price for the Amended Convertible Notes and the determination of the conversion price for the New Convertible Notes. In particular, the Company expects that many holders of the Amended Convertible Notes employ, and holders of the New Convertible Notes will employ, a convertible arbitrage strategy with respect to the such notes and have or will establish a short position with respect to the Company’s common stock that they would modify or establish through purchases or sales of the Company’s common stock and/or entering into or unwinding various derivatives with respect to the Company’s common stock, as the case may be, in connection with the Amendments or the Subscription. These transactions could cause or avoid an increase or a decrease in the market price of the Company’s common stock, which may also affect the trading price of the Amended Convertible Notes or the New Convertible Notes at that time.
In connection with the pricing of the Existing Notes in February of 2024, the Company entered into privately negotiated capped call transactions with certain financial institutions (the “option counterparties”). The capped call transactions cover, subject to anti-dilution adjustments substantially similar to those applicable to the Existing Notes, the number of shares of the Company’s common stock underlying the Existing Notes. In connection with the Amendments, the Company entered into agreements to amend certain terms of the capped call transactions. Following such amendment of the capped call transactions, the option counterparties or their respective affiliates may modify or terminate their hedge positions by entering into or unwinding various derivatives with respect to the Company's common stock and/or purchasing or selling the Company’s common stock or other securities of the Company concurrently with or shortly after such amendment of the capped call transactions and also prior to the maturity of the Amended Convertible Notes (and are likely to do so during any observation period related to a conversion of the Amended Convertible Notes or following any repurchase or redemption of the Amended Convertible Notes by the Company). This activity could also cause or avoid an increase or a decrease in the market price of the Company’s common stock or the Amended Convertible Notes or the New Convertible Notes at that time.
Neither the Amended Convertible Notes, the New Convertible Notes, nor any shares of the Company’s common stock issuable upon conversion of the Amended Convertible Notes or the New Convertible Notes, have been registered under the Securities Act or any state securities laws, and unless so registered, may not be offered or sold in
This press release shall not constitute an offer to sell or a solicitation of an offer to buy the Amended Convertible Notes, the New Convertible Notes, the Company’s common stock potentially issuable upon conversion of the Amended Convertible Notes or the New Convertible Notes or any other securities, and will not constitute an offer, solicitation or sale in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful.
Cautionary Statement Regarding Forward-Looking Statements
This press release includes forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements include, among other things, statements regarding the intended use of the proceeds from the Subscription and the potential impact of anticipated transactions by holders of the Amended Convertible Notes, the New Convertible Notes, and the option counterparties on the Company’s securities. Forward-looking statements may be identified by the use of the words “could,” “may,” “will,” “expect,” “intend” and other similar expressions. These forward-looking statements are provided for illustrative purposes only and are not intended to serve as, and must not be relied on by any investor as, a guarantee, an assurance, a prediction or a definitive statement of fact or probability. These forward-looking statements are based on management’s current expectations and beliefs about 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 include, but are not limited to, the risks related to whether the Company will consummate the Amendments or the Subscription, the anticipated effects of holders of the Amended Convertible Notes or the New Convertible Notes or the option counterparties entering into or unwinding derivative transactions with respect to the Company’s common stock and/or purchasing or selling the Company’s common stock, market and general conditions, and risks relating to the Company’s business, including those described in periodic reports that the Company files from time to time with the Securities and Exchange Commission. The forward-looking statements included in this press release speak only as of the date of this press release, and the Company does not undertake to update the statements included in this press release for subsequent developments, except as may be required by law.
About Super Micro Computer, Inc.
Supermicro (NASDAQ: SMCI) is a global leader in Application-Optimized Total IT Solutions. Founded and operating in
Supermicro, Server Building Block Solutions, and We Keep IT Green are trademarks and/or registered trademarks of Super Micro Computer, Inc.
View source version on businesswire.com: https://www.businesswire.com/news/home/20250212568166/en/
Investor Relations Contact:
Nicole Noutsios
Stratos Advisors
email: ir@supermicro.com
Source: Super Micro Computer, Inc.
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