WisdomTree Announces 9% Earnings Accretive Series A Preferred Stock Repurchase and Pricing of Offering of $300 Million of Convertible Senior Notes and Related Exercise of $45 Million Greenshoe
WisdomTree (NYSE: WT) has announced the pricing of $300 million in convertible senior notes due 2029, with an additional $45 million option exercised by the initial purchaser. The notes, bearing a 3.25% interest rate, are convertible at $11.82 per share. WisdomTree plans to use the proceeds to repurchase $104 million of its 2028 notes, buy back 5.7 million shares of common stock, and repurchase all Series A preferred stock from ETFS Capital for $144 million. This preferred stock repurchase is expected to be 9% accretive to WisdomTree's earnings. The company anticipates a one-time loss of about $30 million on the 2028 notes repurchase.
WisdomTree (NYSE: WT) ha annunciato il prezzo di 300 milioni di dollari in note senior convertibili con scadenza nel 2029, con un'opzione aggiuntiva di 45 milioni di dollari esercitata dal compratore iniziale. Le note, con un tasso di interesse del 3,25%, sono convertibili a 11,82 dollari per azione. WisdomTree prevede di utilizzare i proventi per riacquistare 104 milioni di dollari delle sue note 2028, riacquistare 5,7 milioni di azioni ordinarie e riacquistare tutte le azioni privilegiate di Serie A da ETFS Capital per 144 milioni di dollari. Si prevede che questo riacquisto di azioni privilegiate sia accretivo del 9% sugli utili di WisdomTree. L'azienda prevede una perdita una tantum di circa 30 milioni di dollari sul riacquisto delle note 2028.
WisdomTree (NYSE: WT) ha anunciado el precio de 300 millones de dólares en notas senior convertibles con vencimiento en 2029, con una opción adicional de 45 millones de dólares ejercida por el comprador inicial. Las notas, que tienen una tasa de interés del 3,25%, son convertibles a 11,82 dólares por acción. WisdomTree planea utilizar los ingresos para recomprar 104 millones de dólares de sus notas de 2028, recomprar 5,7 millones de acciones ordinarias y recomprar todas las acciones preferentes de Serie A de ETFS Capital por 144 millones de dólares. Se espera que esta recompra de acciones preferentes sea acreativa del 9% para las ganancias de WisdomTree. La empresa anticipa una pérdida única de aproximadamente 30 millones de dólares en la recompra de las notas de 2028.
WisdomTree (NYSE: WT)는 2029년 만기 convertible senior notes를 3억 달러에 발행한다고 발표했으며, 초기 구매자가 행사한 추가 4천5백만 달러의 옵션도 포함됩니다. 이 노트는 3.25%의 이자율을 가지고 있으며, 주당 11.82달러로 전환할 수 있습니다. WisdomTree는 이 자금을 사용하여 2028년 만기의 노트 1억 4천만 달러를 재구매하고, 570만 주의 보통주를 다시 사들이며 ETFS Capital로부터 1억 4천4백만 달러에 모든 A형 우선주를 재구매할 계획입니다. 이 우선주 재구매는 WisdomTree의 수익에 9% 증가 효과가 있을 것으로 예상됩니다. 회사는 2028년 만기 노트 재구매와 관련하여 약 3천만 달러의 일회성 손실을 예상하고 있습니다.
WisdomTree (NYSE: WT) a annoncé le prix de 300 millions de dollars en obligations senior convertibles arrivant à échéance en 2029, avec une option supplémentaire de 45 millions de dollars exercée par l'acheteur initial. Les obligations, portant un taux d'intérêt de 3,25%, sont convertibles à 11,82 dollars par action. WisdomTree prévoit d'utiliser les produits pour racheter 104 millions de dollars de ses obligations 2028, racheter 5,7 millions d'actions ordinaires, et racheter toutes les actions privilégiées de série A de ETFS Capital pour 144 millions de dollars. Ce rachat d'actions privilégiées devrait être accréteur de 9% pour les bénéfices de WisdomTree. L'entreprise anticipe une perte unique d'environ 30 millions de dollars sur le rachat des obligations 2028.
WisdomTree (NYSE: WT) hat die Preisgestaltung von 300 Millionen Dollar in wandelbaren vorrangigen Anleihen mit Fälligkeit im Jahr 2029 bekannt gegeben, wobei eine zusätzliche 45 Millionen Dollar Option, die vom ursprünglichen Käufer ausgeübt wurde, besteht. Die Anleihen haben einen Zinssatz von 3,25% und sind bei 11,82 Dollar pro Aktie wandelbar. WisdomTree plant, die Erlöse zu verwenden, um 104 Millionen Dollar ihrer Anleihen aus dem Jahr 2028 zurückzukaufen, 5,7 Millionen Aktien des Stammkapitals zurückzukaufen und alle Serie A-Vorzugsaktien von ETFS Capital für 144 Millionen Dollar zurückzukaufen. Diese Rückkaufaktion von Vorzugsaktien wird voraussichtlich 9% renditestark für die Gewinne von WisdomTree sein. Das Unternehmen rechnet mit einem einmaligen Verlust von etwa 30 Millionen Dollar im Zusammenhang mit dem Rückkauf der 2028-Anleihen.
- Offering of $345 million in convertible senior notes, including full exercise of $45 million greenshoe option
- Series A preferred stock repurchase expected to be 9% accretive to earnings
- Repurchase of approximately 5.7 million shares of common stock
- Anticipated one-time loss of approximately $30 million on 2028 notes repurchase
- Increase in debt with $300 million new convertible senior notes
- Potential dilution for existing shareholders if notes are converted to common stock
Insights
WisdomTree's announcement is a complex financial maneuver with several key implications. The $300 million convertible note offering, plus the $45 million greenshoe, provides significant capital influx. This is being strategically deployed to repurchase $104 million of existing 2028 notes and all Series A preferred stock, streamlining the capital structure. The 9% earnings accretion from the Series A repurchase is a positive signal for common shareholders. However, the $30 million loss on extinguishment of 2028 notes is a short-term hit to earnings.
The new notes' 3.25% interest rate is favorable compared to the 5.75% on the 2028 notes being repurchased, potentially reducing interest expenses. The initial conversion price of $11.82 represents a 22.5% premium to the current stock price, balancing dilution concerns with attractive terms for note buyers. The redemption option after August 2026 at 130% of the conversion price provides flexibility for WisdomTree if the stock performs well.
Overall, this refinancing strengthens WisdomTree's balance sheet and simplifies its capital structure, but investors should monitor the impact on diluted share count and future earnings.
This financial restructuring by WisdomTree is likely to have mixed effects on market perception. The $55 million share repurchase concurrent with the note offering sends a positive signal about management's confidence in the stock's value. However, the complex nature of the transaction, involving multiple moving parts, may create short-term volatility in the stock price.
The market's reaction will largely depend on how investors interpret the 9% earnings accretion from the Series A preferred stock repurchase versus the potential dilution from the new convertible notes. The initial 22.5% conversion premium provides some protection against immediate dilution, but the long-term impact on the share count will be closely watched.
Investors may also focus on the improved interest rate of the new notes compared to the 2028 notes being repurchased, as this could enhance WisdomTree's profitability. The $30 million loss on extinguishment might be viewed as a necessary cost for long-term financial optimization.
Overall, while the transaction appears strategically sound, its complexity may lead to a period of price discovery as the market fully digests its implications.
WisdomTree Announces Repurchase of:
- Series A Preferred Stock (equivalent to 14.75 Million Shares of Common Stock) from ETFS Capital Limited
-
Approximately
$104 Million 5.75% Convertible Senior Notes due August 2028 - Approximately 5.7 Million Shares of Common Stock
WisdomTree intends to use approximately
Key terms of the notes are as follows:
- Maturity in 5 years – August 15, 2029, unless earlier converted, repurchased or redeemed.
-
Interest rate of
3.25% – The notes will bear interest at a rate of3.25% per year, payable semiannually in arrears on February 15 and August 15 of each year, beginning on February 15, 2025. -
Conversion price of
$11.82 $1,000 $11.82 22.5% to the last reported sale price of$9.65 - Conversion – Prior to May 15, 2029, the notes will be convertible at the option of the holders of the notes only upon the satisfaction of certain conditions and during certain periods, and thereafter, at any time until the close of business on the second scheduled trading day immediately preceding the maturity date.
- Cash settlement of principal amount – Upon conversion, WisdomTree will pay cash up to the aggregate principal amount of the notes to be converted. At its election, WisdomTree will also settle its conversion obligation in excess of the aggregate principal amount of the notes being converted in either cash, shares of its common stock or a combination of cash and shares of its common stock.
-
Redemption price of
$15.37 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive), including the trading day immediately preceding the date on which WisdomTree provides notice of redemption, during any 30 consecutive trading day period ending on, and including, the trading day immediately preceding the date on which WisdomTree provides notice of redemption, at a redemption price equal to100% of the principal amount of the notes to be redeemed, plus accrued and unpaid interest to, but excluding the redemption date. -
Limited investor put rights – Holders of the notes will have the right to require WisdomTree to repurchase for cash all or a portion of their notes at
100% of their principal amount, plus any accrued and unpaid interest, upon the occurrence of certain change of control transactions or liquidation, dissolution or common stock delisting events (collectively “fundamental changes”). - Conversion rate increase in certain customary circumstances – WisdomTree will also be required to increase the conversion rate for holders who convert their notes in connection with fundamental changes and certain other corporate events or convert their notes called for redemption (or deemed called for redemption) following delivery by WisdomTree of a notice of redemption, in either case, in certain circumstances.
When issued, the notes will be WisdomTree’s senior unsecured obligations, and will rank equal in right of payment to the Company’s
Contemporaneously with the pricing of the notes in the offering, WisdomTree entered into separate privately negotiated transactions with certain holders of the 2028 notes to repurchase approximately
WisdomTree expects that certain holders of 2028 notes that sell their 2028 notes in negotiated transactions with WisdomTree may enter into or unwind various derivatives with respect to WisdomTree’s common stock and/or purchase shares of its common stock in the market. The amount of WisdomTree’s common stock that such holders purchase may be substantial in relation to the historic average daily trading volume of the common stock. In addition, WisdomTree expects that certain purchasers of the notes offered in the offering may establish a short position with respect to WisdomTree’s common stock by short selling the common stock or by entering into short derivative positions with respect to the common stock, in each case, in connection with the offering. The net effect of the above market activities by holders of 2028 notes and purchasers of the notes offered in the offering could increase (or reduce the size of any decrease in) or decrease (or reduce the size of any increase in) the market price of WisdomTree’s common stock and/or the market price of the notes offered in the offering, and WisdomTree cannot predict the magnitude of such market activities or the overall effect they will have on the market price of the notes offered hereby and/or the market price of WisdomTree’s common stock.
WisdomTree intends to use approximately
The notes were only offered to qualified institutional buyers pursuant to Rule 144A under the Securities Act. The notes and the common stock issuable upon conversion of the notes, if any, have not been and will not be registered under the Securities Act, or any state securities laws, and unless so registered, may not be offered or sold in
This announcement is neither an offer to sell nor a solicitation of an offer to buy any of these securities and shall not constitute an offer, solicitation or sale in any jurisdiction in which such offer, solicitation or sale is unlawful.
About WisdomTree
WisdomTree is a global financial innovator, offering a well-diversified suite of exchange-traded products (ETPs), models, solutions and products leveraging blockchain technology. We empower investors and consumers to shape their future and support financial professionals to better serve their clients and grow their businesses. WisdomTree is leveraging the latest financial infrastructure to create products that provide access, transparency and an enhanced user experience. Building on our heritage of innovation, we are also developing and have launched next-generation digital products, services and structures, including digital or blockchain-enabled mutual funds and tokenized assets, as well as our blockchain-native digital wallet, WisdomTree Prime®.*
* The WisdomTree Prime digital wallet and digital asset services are made available through WisdomTree Digital Movement, Inc., a federally registered money services business, state-licensed money transmitter and financial technology company (NMLS ID: 2372500) or WisdomTree Digital Trust Company, LLC, in select
WisdomTree currently has approximately
WisdomTree® is the marketing name for WisdomTree, Inc. and its subsidiaries worldwide.
Cautionary Statement Regarding Forward-Looking Statements
This press release contains forward-looking statements that are based on WisdomTree’s management’s beliefs and assumptions and on information currently available to management. Although WisdomTree believes that the expectations reflected in these forward-looking statements are reasonable, these statements relate to future events or WisdomTree’s future financial performance, and involve known and unknown risks, uncertainties and other factors that may cause actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “expects,” “intends,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential,” “continue” or the negative of these terms or other comparable terminology. These statements are only predictions. You should not place undue reliance on forward-looking statements because they involve known and unknown risks, uncertainties and other factors, which are, in some cases, beyond WisdomTree’s control and which could materially affect results. Factors that may cause actual results to differ materially from current expectations include, among other things, the risks described below. If one or more of these or other risks or uncertainties occur, or if WisdomTree’s underlying assumptions prove to be incorrect, actual events or results may vary significantly from those implied or projected by the forward-looking statements. No forward-looking statement is a guarantee of future performance. You should read this press release completely and with the understanding that WisdomTree’s actual future results may be materially different from any future results expressed or implied by these forward-looking statements.
In particular, forward-looking statements in this press release may include statements about the timing and closing of the offering of the notes, the expected use of the proceeds from the sale of the notes, the closing of the Series A preferred stock repurchase and the potential effects of the 2028 notes repurchases and the share repurchases on WisdomTree’s common stock and the market price for the notes, and other statements contained in this press release that are not historical facts. Forward-looking statements are subject to many risks and uncertainties, including without limitation, risks related to or associated with whether WisdomTree will consummate the offering of the notes on the expected terms, or at all, which could differ or change based upon market conditions or other reasons, and the other risks set forth under the caption “Risk Factors” in WisdomTree’s Annual Report on Form 10-K for the year ended December 31, 2023 and Quarterly Reports on Form 10-Q for the quarters ended March 31, 2024 and June 30, 2024.
Category: Business Update
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Investor Relations
Jeremy Campbell
+1.917.267.3859
jeremy.campbell@wisdomtree.com
Corporate Communications
Jessica Zaloom
+1.917.267.3735
jzaloom@wisdomtree.com
Source: WisdomTree, Inc.
FAQ
What is the interest rate and maturity of WisdomTree's new convertible notes (WT)?
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What is the expected impact of the Series A preferred stock repurchase on WisdomTree's earnings (WT)?
