Cloudflare Prices $1.75 Bln Convertible Senior Notes Due 2030

(RTTNews) - Cloudflare, Inc. (NET), a connectivity cloud company, on Friday announced the pricing of $1.75 billion aggregate principal amount of Convertible Senior Notes due 2030. The sale of the notes is expected to be completed on June 17.

The notes can be converted at an initial rate of 4.0376 shares of the company's Class A common stock for every $1,000 of principal.

This equals a conversion price of about $247.67 per share, reflecting a 45% premium over the June 12 closing price of $170.81.

The company expects to receive around $1.72 billion in net proceeds after deducting the initial purchasers' discount and estimated offering expenses. The company gave the initial buyers a 13-day option to buy up to an extra $250 million in notes to cover any over-allotments.

As part of the pricing, Cloudflare entered into private capped call transactions with certain initial buyers, their affiliates, or other financial firms. The cap is initially set at about $469.73 per share, roughly 175% above the June 12 closing price of $170.81, and may be adjusted under the terms of the agreement.

The company plans to use about $248 million of the net proceeds from the note offering to cover the cost of the capped call transactions.

The remaining funds will be used for general corporate purposes, such as working capital, capital spending, debt repayment, and potential acquisitions or strategic deals.

In the pre-market trading, Cloudflare is 2,59% lesser at $166.39 on the New York Stock Exchange.