AES Semigas


4 March 2022

Lumentum announces pricing of $750m convertible notes offering

Lumentum Holdings Inc of San Jose, CA, USA (which designs and makes photonics products for optical networks and lasers for industrial and consumer markets) has announced the pricing of $750m of convertible senior notes due 2028 in a private placement to qualified institutional buyers (pursuant to Rule 144A under the Securities Act of 1933, as amended). Lumentum granted the initial purchasers a 13-day option to purchase up to an additional $112.5m of the notes. The sale of the notes to the initial purchasers is expected to settle on 8 March (subject to customary closing conditions) and is expected to result in about $743.2m (or $854.8m, if the initial purchasers fully exercise their option to purchase additional notes) in net proceeds after deducting the initial purchasers’ discount and estimated offering expenses payable by Lumentum.

The notes will be senior, unsecured obligations of Lumentum, bearing interest at a rate of 0.50% per year (payable semi-annually in arrears on 15 June and 15 December of each year, beginning on 15 June 2022). The notes will mature on 15 June 2028, unless earlier redeemed, repurchased or converted.

Lumentum intends to use a portion of the net proceeds of the offering to purchase about $200m of its common stock concurrently with the pricing of this offering in privately negotiated transactions effected through one of the initial purchasers of the notes or its affiliate, as Lumentum’s agent. Lumentum intends to use the remaining net proceeds for general corporate purposes, which may include capital expenditures and working capital.

The initial conversion rate for the notes is 7.6319 shares of Lumentum common stock per $1000 of notes (equivalent to an initial conversion price of about $131.03 per share) and is subject to adjustment upon the occurrence of certain events. Prior to the close of business on the business day immediately preceding 15 March 2028, the notes will be convertible at the option of the noteholders upon satisfaction of specified conditions and during certain periods. Thereafter, until the close of business on the second scheduled trading day preceding the maturity date, the notes will be convertible at the option of the noteholders at any time regardless of these conditions. Conversions of the notes will be settled in cash, shares of common stock or a combination of cash and shares, with the form of consideration at Lumentum’s election. The initial conversion price represents a premium of about 32.5% over the last reported sale price of Lumentum’s common stock on 3 March of $98.89 per share.

Lumentum may redeem for cash all or any portion of the notes, at its option (subject to certain limitations), on or after 20 June 2025, if the last reported sale price of its common stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading-day period (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date on which Lumentum 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. No sinking fund is provided for the notes.

Tags: Optical communications



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