Cloudflare Issues $2.5B 0% Convertible Senior Notes Due 2031
Cloudflare, Inc. issued $2.50 billion aggregate principal amount of 0% Convertible Senior Notes due 2031. The notes will not bear regular interest and mature on August 15, 2031, with an initial conversion price of $496.94 per share, representing a 60% premium to the last reported stock price. The company also entered into capped call transactions to offset potential dilution, with a cap price of $854.12 per share. A portion of the net proceeds, approximately $225.8 million, will be used to pay for these capped call transactions, with the remainder for general corporate purposes. Additionally, Cloudflare amended its Revolving Credit and Guaranty Agreement to modify the calculation of its Total Net Leverage Ratio.
Key Highlights
- Issued $2.50 billion aggregate principal amount of 0% Convertible Senior Notes due 2031.
- Notes mature on August 15, 2031, with no regular interest.
- Initial conversion rate of 2.0123 shares per $1,000 principal amount, equivalent to $496.94 per share.
- Initial conversion price represents a 60% premium to the August 10, 2026 closing price of $310.59.
- Entered into capped call transactions covering shares underlying the notes, with a cap price of $854.12 per share.
- Capped call cap price represents a 175% premium over the August 10, 2026 stock price.
- Intends to use $225.8 million of net proceeds for capped call transactions.
- Amended Revolving Credit and Guaranty Agreement to adjust the Total Net Leverage Ratio calculation.
Price Impact
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