On June 9, 2021, WisdomTree Investments, Inc. (the “Company”) issued a press release, a copy of which is filed as Exhibit 99.1 hereto and is incorporated by reference herein, announcing the Company’s intention to offer, subject to market conditions and other factors, $150.0 million aggregate principal amount of its convertible senior notes due 2026 (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”). The Company also expects to grant 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 Company intends to use approximately $30 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 price per share of the Company’s common stock repurchased in such transactions is expected to equal the last reported price per share of its common stock as of the date of the pricing of the notes. These repurchase transactions could have the effect of increasing, or limiting a decline in, the market price of the Company’s common stock concurrently with or following the pricing of the notes, and could result in a higher effective conversion price for the notes. The Company intends to use the remainder of the net proceeds for working capital and other general corporate purposes, which may include debt retirement, organic and inorganic growth initiatives and common stock repurchases.
Anticipated key terms of the notes are as follows:
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Interest – Interest on the notes will be payable semiannually in arrears on June 15 and December 15 of each year, beginning on December 15, 2021. The notes will mature on June 15, 2026, unless earlier converted, repurchased or redeemed.
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Conversion – Prior to March 15, 2026, 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.
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Cash settlement of principal amount in connection with conversions – Upon conversion, the Company will pay cash up to the aggregate principal amount of the notes to be converted. At its election, the Company 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.
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Redemption – The notes will be redeemable, in whole or in part, for cash at the Company’s option at any time, and from time to time, on or after June 20, 2023 in certain circumstances. The redemption price will be equal to the principal amount of the notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date.
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Limited investor put rights – Holders of the notes will have the right to require the Company 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 changes”).
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Conversion rate increase in certain customary circumstances – The Company 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 the Company of a notice of redemption, in either case, in certain circumstances.
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The interest rate, conversion rate and other terms of the notes are to be determined upon pricing of the offering.
When issued, the notes will be the Company’s senior unsecured obligations and will rank equal in right of payment to its 4.25% convertible senior notes due 2023, but will be subordinated in right of payment to the Company’s obligations to make certain redemption payments (if and when due) in respect of its Series A preferred stock.
The notes will only be 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 Current Report on Form 8-K 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.