Inphi Corporation Announces Proposed Offering of $330 Million of Convertible Senior Notes
April 21 2020 - 7:33AM
Inphi Corporation (NYSE: IPHI) today announced its intention to
offer, subject to market conditions and other factors, $330 million
aggregate principal amount of convertible senior notes due 2025
(the “notes”) in a private offering to qualified institutional
buyers pursuant to an exemption from the registration requirements
of the Securities Act of 1933, as amended (the “Securities Act”).
In connection with the offering, Inphi expects to grant the initial
purchasers of the notes an option to purchase up to an additional
$50 million aggregate principal amount of notes on the same terms
and conditions.
Inphi intends to use a portion of the net proceeds from the
offering of the notes to pay the cost of certain capped call
transactions described below. Inphi also intends to use a portion
of the net proceeds from the offering of the notes to pay the cash
portion of the consideration Inphi delivers in connection with any
exchange transactions for up to $100 million aggregate principal
amount of its existing 1.125% Convertible Senior Notes due 2020
(the “2020 Notes”) described below. Inphi intends to use the
remainder of the net proceeds from the offering of the notes for
general corporate purposes, including payments with respect to its
outstanding 2020 Notes when due and financing potential
acquisitions and other strategic transactions. However, Inphi
currently has no commitments with respect to any such acquisitions
or other strategic transactions.
Contemporaneously with the pricing of the offering, Inphi
intends to enter into separate and privately negotiated
transactions with one or more holders of the 2020 Notes to exchange
up to $100 million aggregate principal amount of the 2020 Notes for
a combination of cash and shares of Inphi’s common stock. The terms
of any exchanges of the 2020 notes will be individually negotiated
with each holder and will depend on a number of factors, including
the market price of Inphi’s common stock and the trading price of
the 2020 notes at the time of such exchanges. Inphi expects that
holders of 2020 Notes that exchange their 2020 Notes may purchase
or sell shares of Inphi’s common stock and/or enter into or unwind
various derivatives with respect to Inphi’s common stock (including
entering into derivatives with one or more of the initial
purchasers or their respective affiliates) concurrently with or
shortly after the pricing of the notes. This activity could affect
the market price of Inphi’s common stock and could also impact the
initial conversion price of the notes.
When issued, the notes will be unsecured, senior obligations of
Inphi, and interest will be payable semi-annually in arrears. Prior
to the close of business on the business day immediately preceding
October 15, 2024, the notes will become convertible only under
certain circumstances and during certain periods. Inphi will settle
conversions of the notes by paying or delivering, as the case may
be, cash, shares of its common stock, or a combination of cash and
shares of its common stock, at its election. Final terms of the
notes, including the interest rate, the initial conversion rate,
repurchase or redemption rights and other terms, will be determined
at the time of pricing by negotiations between Inphi and the
initial purchasers of the notes.
If the initial purchasers exercise their option to purchase
additional notes, Inphi intends to use a portion of the resulting
additional net proceeds from the sale of the additional notes to
pay the cost of entering into additional capped call transactions
and the remainder of the net proceeds from the sale of the
additional notes for general corporate purposes.
In connection with the pricing of the notes, Inphi expects to
enter into privately negotiated capped call transactions with one
or more financial institutions, which may include one or more of
the initial purchasers or their respective affiliates and/or other
financial institutions (the “option counterparties”). The capped
call transactions are expected generally to reduce or offset the
potential dilution to Inphi’s common stock upon any conversion of
the notes at maturity and/or offset the potential cash payments
Inphi is required to make in excess of the principal amount of
converted notes, with such reduction and/or offset subject to a cap
based on the cap price. If the initial purchasers exercise their
option to purchase additional notes, Inphi expects to enter into
additional capped call transactions with the option
counterparties.
Inphi expects that, in connection with establishing their
initial hedge of the capped call transactions, the option
counterparties or their respective affiliates will purchase shares
of Inphi’s common stock and/or enter into various derivative
transactions with respect to Inphi’s common stock concurrently with
or shortly after the pricing of the notes. This activity could
increase (or reduce the size of any decrease in) the market price
of Inphi’s common stock or the notes at that time, and could result
in a higher effective conversion price for the notes.
In addition, Inphi has been advised by the option counterparties
that the option counterparties or their respective affiliates may
modify their hedge positions by entering into or unwinding various
derivative transactions with respect to Inphi’s common stock and/or
purchasing or selling Inphi’s common stock in secondary market
transactions following the pricing of the notes and prior to the
maturity of the notes (and are likely to do so during the valuation
period for the capped call transactions, which is expected to occur
during the 30 trading day period beginning on the 31st scheduled
trading day prior to the maturity of the notes). This activity
could also cause or avoid an increase or a decrease in the market
price of Inphi’s common stock or the notes, which could affect the
ability of noteholders to convert the notes and, to the extent the
activity occurs during any observation period related to a
conversion of the notes, it could affect the amount and value of
the consideration that noteholders will receive upon conversion of
the notes.
This press release does not constitute an offer to sell or the
solicitation of an offer to buy securities and shall not constitute
an offer, solicitation or sale in any jurisdiction in which such
offer, solicitation or sale is unlawful. The notes and the shares
of Inphi’s common stock issuable upon conversion of the notes, if
any, have not been registered under the Securities Act or the
securities laws of any other jurisdiction and, unless so
registered, may not be offered or sold in the United States except
pursuant to an exemption from such registration requirements.
Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995, including statements regarding the intention to offer the
notes, the intended use of net proceeds from the offering, the
expected terms of the offering, the extent and potential effects of
the capped call transactions and the exchanges of the 2020
Notes. These forward-looking statements are subject to risks
and uncertainties that may cause actual results to differ
materially, including risks related to whether Inphi will offer the
notes or consummate the offering of the notes on the expected
terms, or at all, whether Inphi will consummate the exchanges of
the 2020 Notes, the potential impact of market and other general
economic conditions, whether Inphi will be able to satisfy the
conditions required to close any sale of the notes, the anticipated
use of the net proceeds of the offering, the fact that Inphi’s
management will have broad discretion in the use of the proceeds
from any sale of the notes, whether the capped call transactions
will become effective on the anticipated terms or at all, and other
risks detailed from time to time in Inphi’s filings with the
Securities and Exchange Commission, including its Annual Report on
Form 10-K for the year ended December 31, 2019 and its Current
Report on Form 8-K dated April 21, 2020. The forward-looking
statements in this press release are based on information available
to Inphi as of the date hereof, and Inphi does not assume any
obligation to update the forward-looking statements provided to
reflect events that occur or circumstances that exist after the
date on which they were made except as otherwise required by
law.
Investor Contact:
Vernon P. Essi, Jr.
408-606-6524
vessi@inphi.com
Corporate Contact:
Kim Markle
408-217-7329
kmarkle@inphi.com
Inphi (NASDAQ:IPHI)
Historical Stock Chart
From Jun 2024 to Jul 2024
Inphi (NASDAQ:IPHI)
Historical Stock Chart
From Jul 2023 to Jul 2024