AES Semigas


13 June 2023

Lumentum announces $500m convertible notes offering

Lumentum Holdings Inc of San Jose, CA, USA (which designs and makes optical and photonic products for optical networks and lasers for industrial and consumer markets) is to offer (subject to market conditions and other factors) $500m worth of convertible senior notes due in 2029 in a private placement to qualified institutional buyers (pursuant to Rule 144A under the Securities Act of 1933, as amended). Lumentum also expects to grant the initial purchasers of the notes a 13-day option to purchase up to an additional $75m of the notes.

The notes will be senior, unsecured obligations of Lumentum, and interest will be payable semi-annually in arrears. They will be convertible at the option of holders (subject to certain conditions and during certain periods) into cash, shares of Lumentum’s common stock or a combination of cash and shares of Lumentum’s common stock, with the form of consideration at Lumentum’s election. The interest rate, conversion rate and certain other terms of the notes are to be determined upon pricing of the offering.

Lumentum intends to use part of the net proceeds of the offering to (i) repurchase a portion of its 0.250% convertible senior notes due 2024, and (ii) purchase up to about $150m of its common stock, in each case, concurrently with the pricing of the offering in privately negotiated transactions effected through one of the initial purchasers of the notes or its affiliate, as its agent. Lumentum intends to use the remaining net proceeds for general corporate purposes, which may include the repayment or repurchase of its indebtedness, including any of its existing convertible notes, capital expenditures, working capital and potential acquisitions.

Holders of the 2024 notes that are repurchased in the concurrent repurchases described above may purchase shares of Lumentum’s common stock in the open market to unwind any hedge positions they may have with respect to the 2024 notes. These activities may affect the trading price of Lumentum’s common stock and, if conducted concurrently with this offering, may result in a higher initial conversion price for the notes that Lumentum is offering. Additionally, the concurrent repurchases of shares of Lumentum’s common stock may result in the common stock trading at prices that are higher than would be the case in the absence of these repurchases, which may result in a higher initial conversion price for the notes that Lumentum is offering.

Tags: Optical communications


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