© Reuters.
ATLANTA – Global Payments Inc. (NYSE:), a leading payments technology company, has announced the pricing of its $1.75B convertible senior notes offering, due in 2031. The offering, which also includes an option for initial purchasers to buy an additional $250Min notes, is expected to close on February 23, 2024, subject to customary conditions.
The convertible notes will accrue interest at a rate of 1.50% per annum, payable semi-annually, and will mature on March 1, 2031, unless repurchased, redeemed, or converted earlier. Conversion of the notes is subject to specific conditions and time periods, with an initial conversion rate set at 6.3710 shares of common stock per $1,000 principal amount (equivalent to an initial conversion price of approximately $156.96 per share).
Global Payments has set a premium of about 20% over the $130.80 closing stock price as of February 20, 2024, for the initial conversion price of the notes. The company may not redeem the notes before March 6, 2028, but may do so thereafter under certain conditions at a redemption price equal to the principal amount plus accrued interest.
In the event of a fundamental change, as defined in the indenture, note holders may require the company to repurchase their notes at 100% of the principal amount plus accrued interest.
The net proceeds from the offering are estimated at approximately $1.72B, or $1.96 billion if the additional notes option is exercised fully. These funds will be used for various corporate purposes, including repaying borrowings under the company’s commercial paper program and revolving credit agreement, repurchasing common stock, and covering the cost of capped call transactions.
Global Payments has entered into capped call transactions to potentially reduce dilution to its common stock upon conversion of the notes or to offset cash payments required upon conversion, subject to a cap. The initial cap price is set at $228.90 per share, a 75% premium over the stock’s closing price on February 20, 2024.
The company also plans to repurchase shares of its common stock from purchasers of the convertible notes at the February 20, 2024, closing price, which may impact the market price of the company’s common stock or the notes.
The convertible notes and any common stock issued upon conversion have not been registered under the Securities Act of 1933 and will be offered only to qualified institutional buyers. This press release does not constitute an offer to sell or a solicitation of an offer to buy any securities.
This news article is based on a press release statement from Global Payments Inc.
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