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1 March 2019

Applied Optoelectronics prices $70m offering at $17.55 per share

Applied Optoelectronics Inc (AOI) of Sugar Land, TX, USA – a designer and manufacturer of optical components, modules and equipment for fiber access networks in the Internet data-center, cable TV broadband, fiber-to-the-home (FTTH) and telecom markets – has priced its offering of $70m worth of 5.00% convertible senior notes due 2024 (announced on 27 February). AOI also granted initial purchasers an option to purchase up to an additional $10.5m of notes.

Subject to customary closing conditions, sale to initial purchasers is expected to settle on 5 March and result in about $66.3m in net proceeds to AOI (or about $76.4m if the initial purchasers fully exercise their option to purchase additional notes).

AOI intends to use about $38.3m of the net proceeds to fully repay its capital expenditure loan and real-estate term loan with Branch Banking and Trust Company and to use the remainder for general corporate purposes.

The notes will bear interest at a rate of 5.00% per year, payable semi-annually in arrears on 15 March and 15 September of each year, beginning on 15 September 2019. They will mature on 15 March 2024, unless earlier repurchased, redeemed or converted. The notes will be fully and unconditionally guaranteed, on a senior unsecured basis, by certain of AOI’s future domestic subsidiaries.

The notes will be convertible at the option of holders at any time until the close of business on the scheduled trading day immediately preceding the maturity date. Upon conversion, holders will receive shares of common stock, together, if applicable, with cash in lieu of any fractional share, at the then-applicable conversion rate. The initial conversion rate will be 56.9801 shares of AOI common stock per $1000 of notes (representing an initial conversion price of about $17.55 per share of common stock), subject to customary adjustments.

AOI may not redeem the notes prior to 15 March 2022. On or after 15 March 2022, AOI may redeem for cash all or part of the notes if the last reported sale price per share of common stock exceeds 130% of the conversion price on (i) each of at least 20 trading days, whether or not consecutive, during the 30 consecutive trading days ending on, and including, the trading day immediately before the date AOI sends the related redemption notice; and (ii) the trading day immediately before the date AOI sends such redemption notice. The redemption price will be equal to 100% of the principal amount of the notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date.

See related items:

Applied Optoelectronics announces $70m private offering of convertible senior notes

Tags:  Optical transceivers

Visit:  www.ao-inc.com

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