WisdomTree Prices Offering of $25.0 Million of 4.25% Convertible Senior Notes
August 11 2020 - 7:15AM
WisdomTree Investments, Inc. (NASDAQ: WETF) (“WisdomTree”) today
announced the pricing of an offering of $25.0 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”), at an issue price of
101% of par value plus accrued interest from June 16, 2020.
The sale of the notes to the initial purchaser is expected to
settle on August 13, 2020, subject to customary closing conditions,
and is expected to result in approximately $24.2 million in net
proceeds to WisdomTree after deducting the initial purchaser’s
discount and estimated offering expenses payable by WisdomTree.
WisdomTree intends to use approximately $4.4 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 $4.27 per share on August 10, 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. WisdomTree intends to use the balance of
the net proceeds from this offering for working capital and other
general corporate purposes.
The notes issuance will constitute a reopening of the indenture
(the “indenture”) that governs WisdomTree’s $150.0 million
aggregate principal amount of 4.25% convertible senior notes due
2023 (the “existing notes”) issued on June 16, 2020. The notes will
be issued as additional notes under the indenture and will have the
same terms and CUSIP number as, and form a single series and be
fungible for U.S. federal income tax purposes with, the existing
notes. Holders of the notes and the existing notes will vote as one
class under the indenture.
Key terms of the notes are as follows:
- Maturity in approximately 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.
- 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
$63.6 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 of the 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, 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 the
Quarterly Reports on Form 10-Q for the three month period ended
March 31, 2020 and the three month period ended June 30, 2020.
Contact Information:
Investor Relations
Jason Weyeneth, CFA
+1.917.267.3858
jweyeneth@wisdomtree.com
Media RelationsJessica
Zaloom+1.917.267.3735jzaloom@wisdomtree.com
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