WisdomTree Prices Offering of $150.0 Million of 4.25% Convertible Senior Notes and Intent to Fully Repay Current Debt Outstan...
June 10 2020 - 7:00AM
WisdomTree Investments, Inc. (NASDAQ: WETF) (“WisdomTree”) today
announced the pricing of its offering of $150.0 million aggregate
principal amount of its convertible senior notes due 2023 (the
“notes”) in a private offering (the “offering”) to qualified
institutional buyers pursuant to Rule 144A under the Securities Act
of 1933, as amended (the “Securities Act”). WisdomTree also
granted the initial purchaser of the notes an option to purchase,
for settlement during a period of 13 days from, and including, the
date the notes are first issued, up to an additional $22.5 million
aggregate principal amount of the notes. The sale of the notes to
the initial purchaser is expected to settle on June 16, 2020,
subject to customary closing conditions, and is expected to result
in approximately $145.5 million (or approximately $167.3 million if
the initial purchaser exercises its option to purchase additional
notes in full) in net proceeds to WisdomTree after deducting the
initial purchaser’s discount and estimated offering expenses
payable by WisdomTree.
WisdomTree intends to use the net proceeds from the offering to
repay and terminate its existing senior secured credit facility and
purchase shares of its common stock as follows:
- approximately $121.6 million of the net proceeds from the
offering and cash on hand and, to the extent the initial purchaser
exercises its option to purchase additional notes to close
concurrently with the closing of the base offering of $150.0
million aggregate principal amount of notes, the net proceeds from
the sale of such additional notes, to repay amounts outstanding
under, and terminate, WisdomTree’s senior secured credit facility,
and
- approximately $23.9 million of the net proceeds from the
offering to repurchase shares of its common stock from certain
purchasers of the notes in privately negotiated transactions
effected through the initial purchaser, as its agent, concurrently
with the settlement of the offering. The purchase price per share
of WisdomTree’s common stock in such repurchases is equal to the
last reported sale price of WisdomTree’s common stock of $3.70 per
share on June 9, 2020. The share repurchases could have the effect
of increasing, or limiting a decline in, the market price of
WisdomTree’s common stock concurrently with or following the
pricing of the notes, and could result in a higher effective
conversion price for the notes.
Key terms of the notes are as follows:
- Maturity in 3 years – June 15, 2023, unless earlier converted,
repurchased or redeemed.
- Interest rate of 4.25% – The notes will bear interest at a rate
of 4.25% per year, payable semiannually in arrears on June 15 and
December 15 of each year, beginning on December 15, 2020.
- Conversion price of $5.92 – The notes will be convertible
at an initial conversion rate of 168.9189 shares of WisdomTree’s
common stock, per $1,000 principal amount of notes (equivalent to
an initial conversion price of approximately $5.92 per share, which
represents a conversion premium of approximately 60% to the last
reported sale price of $3.70 per share of WisdomTree’s common stock
on The NASDAQ Global Select Market on June 9, 2020).
- Conversion – Prior to March 15, 2023, 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 $7.70 – WisdomTree may redeem for cash all
or any portion of the notes, at its option, on or after June 20,
2021 and on or prior to the 55th scheduled trading day immediately
preceding the maturity date, if the last reported sale price of
WisdomTree’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), 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 to 100%
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 transactions”).
- 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, but will be subordinated in right of payment to
WisdomTree’s obligations to make certain redemption payments (if
and when due) in respect of its Series A preferred stock.
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 the United States except pursuant to an
applicable exemption from such registration requirements.
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 Investments, Inc., through its subsidiaries in the
U.S. and Europe, is an ETF and ETP sponsor and asset manager
headquartered in New York. WisdomTree offers products covering
equity, commodity, fixed income, leveraged and inverse, currency
and alternative strategies. WisdomTree currently has approximately
$59.3 billion in assets under management globally.
WisdomTree® is the marketing name for WisdomTree Investments,
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 notes, the expected use of the proceeds from the sale of the
notes and the potential effects of the repurchase transactions on
WisdomTree’s common stock and the conversion 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 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, 2019 and Quarterly Report on Form 10-Q for the three month
period ended March 31, 2020.
Contact Information:
Investor RelationsJason Weyeneth,
CFA+1.917.267.3858jweyeneth@wisdomtree.com
Media RelationsJessica
Zaloom+1.917.267.3735jzaloom@wisdomtree.com
WisdomTree Investments (NASDAQ:WETF)
Historical Stock Chart
From May 2024 to Jun 2024
WisdomTree Investments (NASDAQ:WETF)
Historical Stock Chart
From Jun 2023 to Jun 2024