WisdomTree Announces Pricing of Offering of $150.0 Million of Convertible Senior Notes
10 June 2021 - 9:00PM
WisdomTree Investments, Inc. (NASDAQ: WETF) (“WisdomTree”) today
announced the pricing of its offering of $150.0 million aggregate
principal amount of its convertible senior notes due 2026 (the
“notes”) in a private offering (the “offering”) to qualified
institutional buyers pursuant to Rule 144A under the Securities Act
of 1933, as amended (the “Securities Act”). WisdomTree also granted
the initial purchaser of the notes an option to purchase, for
settlement during a period of 13 days from, and including, the date
the notes are first issued, up to an additional $22.5 million
aggregate principal amount of the notes. The sale of the notes to
the initial purchaser is expected to settle on June 14, 2021,
subject to customary closing conditions, and is expected to result
in approximately $145.7 million (or approximately $167.6 million if
the initial purchaser exercises its option to purchase additional
notes in full) in net proceeds to WisdomTree after deducting the
initial purchaser’s discount and estimated offering expenses
payable by WisdomTree.
WisdomTree intends to use approximately $30.8 million of the net
proceeds from the offering to repurchase shares of its common stock
from certain purchasers of the notes in privately negotiated
transactions effected through the initial purchaser, as its agent,
concurrently with the settlement of the offering. The purchase
price per share of WisdomTree’s common stock in such repurchases is
equal to the last reported sale price of WisdomTree’s common stock
of $6.90 per share on June 9, 2021. The share repurchases could
have the effect of increasing, or limiting a decline in, the market
price of WisdomTree’s common stock concurrently with or following
the pricing of the notes, and could result in a higher effective
conversion price for the notes.
WisdomTree intends to use the remainder of the net proceeds from
the offering for working capital and other general corporate
purposes, which may include debt retirement, organic and inorganic
growth initiatives and common stock repurchases.
Key terms of the notes are as follows:
- Maturity in 5
years – June 15, 2026, unless earlier converted, repurchased
or redeemed.
-
Interest rate of 3.25% – The notes will bear
interest at a rate of 3.25% per year, payable semiannually in
arrears on June 15 and December 15 of each year, beginning on
December 15, 2021.
-
Conversion price of $11.04 – The notes will be convertible at
an initial conversion rate of 90.5797 shares of WisdomTree’s common
stock, per $1,000 principal amount of notes (equivalent to an
initial conversion price of approximately $11.04 per share, which
represents a conversion premium of approximately 60% to the last
reported sale price of $6.90 per share of WisdomTree’s common stock
on The NASDAQ Global Select Market on June 9, 2021).
- Conversion –
Prior to March 15, 2026, the notes will be convertible at the
option of the holders of the notes only upon the satisfaction of
certain conditions and during certain periods, and thereafter, at
any time until the close of business on the second scheduled
trading day immediately preceding the maturity date.
- Cash settlement of
principal amount – Upon conversion, WisdomTree will pay cash
up to the aggregate principal amount of the notes to be converted.
At its election, WisdomTree will also settle its conversion
obligation in excess of the aggregate principal amount of the notes
being converted in either cash, shares of its common stock or a
combination of cash and shares of its common stock.
-
Redemption price of $14.35 – WisdomTree may redeem for cash
all or any portion of the notes, at its option, on or after June
20, 2023 and on or prior to the 55th scheduled trading day
immediately preceding the maturity date, if the last reported sale
price of WisdomTree’s common stock has been at least 130% of the
conversion price then in effect for at least 20 trading days
(whether or not consecutive), including the trading day immediately
preceding the date on which WisdomTree provides notice of
redemption, during any 30 consecutive trading day period ending on,
and including, the trading day immediately preceding the date on
which WisdomTree provides notice of redemption, at a redemption
price equal to 100% of the principal amount of the notes to be
redeemed, plus accrued and unpaid interest to, but excluding the
redemption date.
- Limited investor put
rights – Holders of the notes will have the right to require
WisdomTree to repurchase for cash all or a portion of their notes
at 100% of their principal amount, plus any accrued and unpaid
interest, upon the occurrence of certain change of control
transactions or liquidation, dissolution or common stock delisting
events (collectively “fundamental changes”).
- Conversion rate
increase in certain customary circumstances – WisdomTree will
also be required to increase the conversion rate for holders who
convert their notes in connection with fundamental changes and
certain other corporate events or convert their notes called for
redemption (or deemed called for redemption) following delivery by
WisdomTree of a notice of redemption, in either case, in certain
circumstances.
When issued, the notes will be WisdomTree’s senior unsecured
obligations, and will rank equal in right of payment to its 4.25%
convertible senior notes due 2023, but will be subordinated in
right of payment to WisdomTree’s obligations to make certain
redemption payments (if and when due) in respect of its Series A
preferred stock.
The notes were only offered to qualified institutional buyers
pursuant to Rule 144A under the Securities Act. The notes and the
common stock issuable upon conversion of the notes, if any, have
not been and will not be registered under the Securities Act, or
any state securities laws, and unless so registered, may not be
offered or sold in the United States except pursuant to an
applicable exemption from such registration requirements.
This announcement is neither an offer to sell nor a solicitation
of an offer to buy any of these securities and shall not constitute
an offer, solicitation or sale in any jurisdiction in which such
offer, solicitation or sale is unlawful.
About WisdomTree
WisdomTree Investments, Inc., through its subsidiaries in the
U.S. and Europe, is an ETF and ETP sponsor and asset manager
headquartered in New York. WisdomTree offers products covering
equity, commodity, fixed income, leveraged and inverse, currency,
cryptocurrency and alternative strategies. WisdomTree currently has
approximately $75.9 billion in assets under management
globally.
WisdomTree® is the marketing name for WisdomTree Investments,
Inc. and its subsidiaries worldwide.
Cautionary Statement Regarding Forward-Looking
Statements
This press release contains forward-looking statements that are
based on WisdomTree’s management’s beliefs and assumptions and on
information currently available to management. Although WisdomTree
believes that the expectations reflected in these forward-looking
statements are reasonable, these statements relate to future events
or WisdomTree’s future financial performance, and involve known and
unknown risks, uncertainties and other factors that may cause
actual results, levels of activity, performance or achievements to
be materially different from any future results, levels of
activity, performance or achievements expressed or implied by these
forward-looking statements. In some cases, you can identify
forward-looking statements by terminology such as “may,” “will,”
“should,” “expects,” “intends,” “plans,” “anticipates,” “believes,”
“estimates,” “predicts,” “potential,” “continue” or the negative of
these terms or other comparable terminology. These statements are
only predictions. You should not place undue reliance on
forward-looking statements because they involve known and unknown
risks, uncertainties and other factors, which are, in some cases,
beyond WisdomTree’s control and which could materially affect
results. Factors that may cause actual results to differ materially
from current expectations include, among other things, the risks
described below. If one or more of these or other risks or
uncertainties occur, or if WisdomTree’s underlying assumptions
prove to be incorrect, actual events or results may vary
significantly from those implied or projected by the
forward-looking statements. No forward-looking statement is a
guarantee of future performance. You should read this press release
completely and with the understanding that WisdomTree’s actual
future results may be materially different from any future results
expressed or implied by these forward-looking statements.
In particular, forward-looking statements in this press release
may include statements about the timing and closing of the offering
of the notes, the expected use of the proceeds from the sale of the
notes and the potential effects of the repurchase transactions on
WisdomTree’s common stock and the conversion price for the notes,
and other statements contained in this press release that are not
historical facts. Forward-looking statements are subject to many
risks and uncertainties, including without limitation, risks
related to or associated with whether WisdomTree will consummate
the offering of the notes on the expected terms, or at all, which
could differ or change based upon market conditions or other
reasons, and the other risks set forth under the caption “Risk
Factors” in WisdomTree’s Annual Report on Form 10-K for the year
ended December 31, 2020.
Contact Information:
Corporate CommunicationsJessica
Zaloom+1.917.267.3735jzaloom@wisdomtree.com
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