Akamai Announces Proposed Offering of Convertible Senior Notes

Core Viewpoint - Akamai Technologies, Inc. plans to offer $1.35 billion in convertible senior notes due 2033, with an option for initial purchasers to buy an additional $202.5 million in notes, aimed at qualified institutional buyers [1] Group 1: Offering Details - The convertible senior notes will mature on May 15, 2033, with interest payable semi-annually starting November 15, 2025 [1] - The notes will be senior unsecured obligations of Akamai, and the interest rate and other terms will be determined at the time of pricing [1] Group 2: Use of Proceeds - Akamai intends to use approximately $250 million of the net proceeds to repay borrowings under its revolving credit facility and a portion of its existing convertible senior notes due 2027 [2] - A portion of the net proceeds will also cover costs related to convertible note hedge transactions and share repurchases, with an expected allocation of $275 million for repurchasing common stock [3][4] Group 3: Repurchase and Conversion Terms - Holders of the notes may require Akamai to repurchase their notes for cash on May 15, 2031, if certain conditions are met, at a price equal to 100% of the principal amount plus accrued interest [5] - In the event of a fundamental change, holders may also require repurchase at a similar price [5] Group 4: Hedging Transactions - Akamai plans to enter into convertible note hedge and warrant transactions to mitigate potential dilution from the notes [6] - The hedge transactions will cover the same number of shares underlying the notes, and the warrants could have a dilutive effect if the market price exceeds the strike price [6][7] Group 5: Market Impact - The initial hedge transactions may influence the market price of Akamai's common stock, potentially affecting the conversion and repurchase dynamics of the notes [8]