BEIJING, March 7,
2023 /PRNewswire/
-- iQIYI, Inc. (Nasdaq: IQ) ("iQIYI" or
the "Company"), a leading provider of online entertainment video
services in China, today announced the closing of its
offering (the "Notes Offering") of US$600 million
in aggregate principal amount of 6.50% convertible
senior notes due 2028 (the "Notes"). The Notes bear interest
at a rate of 6.50% per year, payable quarterly in arrears
on March 15, June 15, September
15 and December 15 of each year, beginning
on June 15, 2023. The Notes will mature on March 15,
2028, unless repurchased, redeemed or converted in accordance with
the terms of the Notes prior to such date. The net proceeds of
the Notes Offering (after deducting the initial purchasers'
discounts, taking into account the estimated reimbursement from the
initial purchasers for certain expenses incurred by the Company,
but without deducting other estimated offering expenses payable by
the Company) amounted to approximately US$591 million. The Company intends to use the
net proceeds from the Notes Offering for repayment and/or
repurchase of the existing debt securities.
The Notes are senior and unsecured obligations of the Company.
The Notes rank effectively junior to any of the Company's secured
indebtedness (including certain Company's obligations related to
the outstanding convertible notes due 2028) to the extent of the
value of the assets securing such indebtedness. Holders of the
Notes may not convert the Notes at any time on or prior to the 40th
day following the last date of original issuance of the Notes (such
date, the "Compliance Period End Date"). After the Compliance
Period End Date and prior to the close of business on the business
day immediately preceding September 15, 2027, the Notes will
be convertible only if certain conditions are met. On or after
September 15, 2027 until the
close of business on the second scheduled trading
day immediately preceding the maturity date, the Notes will be
convertible at any time. Upon conversion, holders will receive
cash, the American Depositary Shares, each representing seven Class
A ordinary shares, with par value of $0.00001 per share, of the Company (the
"ADSs") or a combination of cash and ADSs, at the election of the
Company. The Notes will initially be convertible at a
conversion rate of 101.4636 ADSs
per US$1,000 principal amount of Notes, which is
equivalent to an initial conversion price of
approximately US$9.86 per ADS and represents a conversion
premium of approximately 27.5% above the Nasdaq closing price of
the Company's ADSs on February 28,
2023, which was US$7.73 per
ADS. The initial conversion rate is subject to adjustment upon the
occurrence of certain events. On March 16, 2026 or in the
event of certain fundamental changes, the holders of the Notes will
have the right to require the Company to repurchase for cash all or
part 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 to, but excluding, the repurchase date.
The Notes were offered in offshore transactions outside
the United States to certain
non-U.S. persons in compliance with Regulation S under the United
States Securities Act of 1933, as amended (the "Securities Act").
The Notes, the ADSs deliverable upon conversion of the Notes (if
any) and the Class A ordinary shares represented thereby have
not been and will not be registered under the Securities Act or any
other applicable securities laws, and may not be sold or otherwise
transferred except under an exemption from, or in a transaction not
subject to, the registration requirements of the Securities Act and
in compliance with any other applicable securities laws. No public
offering of the Notes, the ADSs deliverable upon conversion of the
Notes (if any) and the Class A ordinary shares represented thereby
was made into the United
States.
Shortly after the pricing of the Notes, the Company entered into
separate and individually privately negotiated agreements with
certain holders of the Company's 4% convertible senior notes due
2026 (the "Existing Notes") to repurchase approximately
US$340 million principal amount of
the Existing Notes for cash (each, a "Repurchase Transaction"). The
terms of each Repurchase Transaction have been privately negotiated
with each holder of the Existing Notes individually.
Holders of the Existing Notes that agreed to sell their Existing
Notes in such Repurchase Transactions, as well as other holders of
the Company's debt securities that the Company may repurchase in
the future (in particular, holders that employ a convertible
arbitrage strategy with respect to their securities) may purchase
the Company's ADSs in the market and/or in privately negotiated
transactions and/or enter into or unwind economically equivalent
derivative transactions, with respect to the Company's ADSs to
hedge their exposure in connection with these Repurchase
Transactions and their investment in the debt securities. In
addition, certain purchasers of the Notes may establish short
positions with respect to their ADSs by short selling the Company's
ADSs or by entering into short derivative positions with respect to
the Company's ADSs, in each case, in connection with the Notes
Offering. Any of the above market activities could affect the
market price of the Company's ADSs or the trading price of the
Notes or other outstanding debt securities of the Company.
This press release shall not constitute an offer to sell or a
solicitation of an offer to purchase any securities, nor shall
there be a sale of the securities in any state or jurisdiction in
which such an offer, solicitation or sale would be unlawful.
About iQIYI, Inc.
iQIYI, Inc. is a leading provider of online entertainment
video services in China. It combines creative talent with
technology to foster an environment for continuous innovation and
the production of blockbuster content. It produces, aggregates and
distributes a wide variety of professionally produced content, as
well as a broad spectrum of other video content in a variety of
formats. The Company distinguishes itself in the online
entertainment industry by its leading technology platform powered
by advanced AI, big data analytics and other core proprietary
technologies. iQIYI attracts a daily subscriber base of more than
100 million, and its diversified monetization model includes
membership services, online advertising services, content
distribution, online games, IP licensing, talent agency, online
literature, etc.
For more information, please contact:
Investor Relations
iQIYI, Inc.
ir@qiyi.com
View original
content:https://www.prnewswire.com/news-releases/iqiyi-announces-the-closing-of-its-offering-of-us600-million-convertible-senior-notes-due-2028-and-concurrent-repurchase-of-convertible-senior-notes-due-2026-301764727.html
SOURCE iQIYI, Inc.