Infinera Corporation Announces the Repurchase of Approximately $83.9M of Convertible Senior Notes Due 2024 using Proceeds from the Reopening of Convertible Senior Notes Due 2028
Transactions further strengthen Infinera balance sheet while keeping average debt coupon expense at less than 3.5% across capital structure
San Jose, Calif. – May 16, 2023 – Infinera Corporation (NASDAQ: INFN) announced today that, to enable the refinancing of a substantial majority of its outstanding 2.125% Convertible Senior Notes due 2024 (the “2024 notes”), it has entered into separate, privately negotiated agreements with certain institutional investors to reopen and issue $100 million in aggregate principal amount of its currently outstanding 3.75% Convertible Senior Notes due 2028 (the “additional 2028 notes”). Net proceeds from the issuance of the additional 2028 notes will be used to repurchase from certain investors approximately $83.9 million in aggregate principal amount of its currently outstanding 2024 notes. Following the closing of the transactions, approximately $18.7 million in aggregate principal amount of 2024 notes will remain outstanding with terms unchanged. Infinera expects to use the remaining net proceeds from the reopening transaction to retire additional 2024 notes from time to time, including at their maturity, and for general corporate purposes.
“The reopening accomplishes our objective of refinancing our near-term maturities while keeping average debt coupon expense at less than 3.5% across the capital structure. In addition, we maintained our existing capped call entered into in connection with the issuance of our 2024 notes, which has the potential to provide future proceeds and corresponding shareholder value,” said Nancy Erba, Infinera CFO.
“Taken together, these transactions, along with our ABL, give us ample capital structure flexibility as we continue to leverage our US-based optical semiconductor and vertical integration capabilities to grow our Systems business and launch our new Subsystems products that will expand our addressable market by billions of dollars. Overall, we remain focused on achieving our stated goal of earning at least $1 of EPS by 2025-2026,” continued Ms. Erba.
HudsonWest LLC acted as sole placement agent in connection with the private placement of the additional 2028 notes. Wilson Sonsini Goodrich & Rosati, Professional Corporation acted as legal advisor to Infinera.
The offer and sale of the additional 2028 notes and the shares of common stock issuable upon conversion of the additional 2028 notes, if any, have not been registered under the Securities Act of 1933, as amended, or the securities laws of any other jurisdiction, and the additional 2028 notes and any such shares may not be offered or sold in the United States absent registration or an applicable exemption from such registration requirements.
This press release shall not constitute an offer to purchase, or a solicitation of an offer to sell the 2024 notes, or an offer to sell, or a solicitation of an offer to buy the additional 2028 notes or any shares of common stock, nor shall there be any purchase of the 2024 notes or shares of common stock or sale of the additional 2028 notes, as applicable, in any state or jurisdiction in which such purchase, offer, solicitation or sale would be unlawful under the securities laws of any such state or jurisdiction.
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Infinera is a global supplier of innovative open optical networking solutions and advanced optical semiconductors that enable carriers, cloud operators, governments, and enterprises to scale network bandwidth, accelerate service innovation, and automate network operations. Infinera solutions deliver industry-leading economics and performance in long-haul, submarine, data center interconnect, and metro transport applications. To learn more about Infinera, visit www.infinera.com, follow us on Twitter and LinkedIn, and subscribe for updates.
Infinera and the Infinera logo are registered trademarks of Infinera Corporation.
This press release contains certain forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements generally relate to future events or Infinera’s future financial or operating performance and are based on current expectations, forecasts and assumptions that involve risks and uncertainties. Such forward-looking statements include, without limitation, the completion, timing and size of the proposed offering and the anticipated use of proceeds from the offering. Forward-looking statements can also be identified by forward-looking words such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “should,” “will,” and “would” or the negative of these words or similar terms or expressions that concern Infinera’s expectations, strategy, priorities, plans or intentions. These statements are based on information available to Infinera as of the date hereof and actual results could differ materially from those stated or implied due to risks and uncertainties.
More information on potential factors that may impact Infinera’s business are set forth in its most current quarterly and annual reports on file with the Securities and Exchange Commission (the “SEC”), including its Quarterly Report on Form 10-Q for the Fiscal Quarter ended April 1, 2023 as filed with the SEC on May 4, 2023, as well as subsequent documents and reports filed with or furnished to the SEC from time to time. These reports are available on the SEC’s website at www.sec.gov. Infinera assumes no obligation to, and does not currently intend to, update any such forward-looking statements.