SAN JOSE, Calif., Sept. 11, 2019 /PRNewswire/ -- Harmonic Inc.
(NASDAQ: HLIT), the worldwide leader in video delivery
infrastructure, today announced the pricing of $105.0
million aggregate principal amount of 2.00% convertible senior
notes due 2024 (the "notes") in a private placement to persons
reasonably believed to be qualified institutional buyers pursuant
to Rule 144A under the Securities Act of 1933, as amended (the
"Securities Act"). Harmonic also granted the initial purchasers of
the notes a 13-day option to purchase up to an additional
$10.5 million aggregate principal
amount of the notes. The sale of the notes is expected to close
on September 13, 2019, subject to customary closing
conditions.
The notes will be senior unsecured obligations of Harmonic, and
will accrue interest payable semiannually in arrears on
March 1 and September 1 of each year, beginning on
March 1, 2020. The notes will mature
on September 1, 2024, unless earlier
converted, redeemed or repurchased. The initial conversion rate
will be 115.5001 shares of Harmonic's common stock ("common stock")
per $1,000 principal amount of notes
(equivalent to an initial conversion price of approximately
$8.66 per share of common stock). The
initial conversion price of the notes represents a premium of
approximately 30% over the last reported sale price of Harmonic's
common stock on The Nasdaq Global Select Market on September 10, 2019. The notes will be
convertible, subject to certain conditions, into cash or cash,
shares of Harmonic's common stock or a combination thereof, at
Harmonic's election.
Harmonic may redeem the notes, at its option, on or after
September 6, 2022, if the last
reported sale price of Harmonic's common stock has been at least
130% of the conversion price then in effect for at least 20 trading
days (whether or not consecutive) during any 30 consecutive trading
day period (including the last trading day of such period) ending
on, and including, the trading day immediately preceding the date
on which Harmonic provides notice of redemption at a redemption
price equal to 100% of the principal amount of the notes to be
redeemed, plus accrued and unpaid interest to, but excluding, the
redemption date.
If a "fundamental change" (as defined in the indenture governing
the notes) occurs at any time prior to the maturity date, holders
of the notes may require Harmonic to repurchase for cash all or any
portion of their notes at a repurchase price equal to 100% of the
principal amount of the notes to be repurchased, plus accrued and
unpaid interest. In addition, following certain corporate events or
if Harmonic issues a notice of redemption, Harmonic will, under
certain circumstances, increase the conversion rate for holders who
convert their notes in connection with such corporate event or
notice of redemption.
Harmonic estimates that the net proceeds from the offering will
be approximately $101.0 million (or
$111.2 million if the initial
purchasers exercise their option to purchase additional notes in
full), after deducting the initial purchasers' discounts and
commissions and estimated offering expenses payable by Harmonic.
Harmonic intends to use the net proceeds from the offering,
together with cash on hand, to repurchase approximately
$82.5 million principal amount of
their outstanding 4.00% convertible senior notes due 2020 (the
"2020 Notes") in privately negotiated transactions concurrently
with the offering of the notes. If the initial purchasers exercise
their option to purchase additional notes, Harmonic intends to use
the net proceeds from the sale of such additional notes for the
repurchase or other retirement of additional outstanding 2020 Notes
and/or other general corporate purposes.
Harmonic expects that those holders of the 2020 Notes that sell
their 2020 Notes may enter into or unwind various derivatives with
respect to Harmonic's common stock and/or purchase or sell shares
of Harmonic's common stock in the market to hedge their exposure in
connection with these transactions. In particular, Harmonic expects
that many holders of the 2020 Notes employ a convertible arbitrage
strategy with respect to the 2020 Notes and have a short position
with respect to Harmonic's common stock that they would close,
through purchases of Harmonic's common stock, in connection with
Harmonic's repurchase of their 2020 Notes. If any such activity
occurs, it could increase (or reduce the size of any decrease in)
the market price of Harmonic's common stock or the notes at that
time.
Neither the notes, nor any shares of Harmonic's common stock
issuable upon conversion of the notes, have been, nor will be,
registered under the Securities Act or any state securities laws
and, unless so registered, such securities may not be offered or
sold absent registration or an applicable exemption from, or in a
transaction not subject to, the registration requirements of the
Securities Act and other applicable securities laws.
This press release is neither an offer to sell nor a
solicitation of an offer to buy any securities, nor shall it
constitute an offer, solicitation or sale of the securities in any
jurisdiction in which such offer, solicitation or sale would be
unlawful prior to the registration or qualification under the
securities laws of any such jurisdiction.
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SOURCE Harmonic Inc.