Bill.com Holdings, Inc. (NYSE: BILL) (“Bill.com”) today
announced that it proposes to offer $500 million aggregate
principal amount of convertible senior notes due 2027 (the
“notes”), subject to market conditions and other factors. The notes
are to be offered and sold in a private placement to qualified
institutional buyers pursuant to Rule 144A under the Securities Act
of 1933, as amended (the “Act”). Bill.com also intends to grant the
initial purchasers of the notes an option to purchase, within a
13-day period from, and including the date on which the notes are
first issued, up to an additional $75.0 million aggregate principal
amount of notes.
The notes will be senior, unsecured obligations of Bill.com, and
interest will be payable semiannually in arrears.
The notes will mature on April 1, 2027, unless earlier
converted, redeemed or repurchased in accordance with the terms of
the notes. Prior to 5:00 p.m., New York City time, on the business
day immediately preceding January 1, 2027, the notes will be
convertible at the option of holders only upon satisfaction of
certain conditions and during certain periods, and thereafter, at
any time until 5:00 p.m., New York City time, on the second
scheduled trading day immediately preceding the maturity date. Upon
conversion, the notes may be settled in shares of Bill.com’s common
stock (the “common stock”), cash or a combination of cash and
shares of common stock, at the election of Bill.com.
Holders of the notes will have the right to require Bill.com 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 a fundamental change (as defined in the indenture
relating to the notes). Bill.com will also be required to increase
the conversion rate for holders who convert their notes in
connection with certain fundamental changes or a redemption notice,
as the case may be, prior to the maturity date. The notes will be
redeemable, in whole or in part, for cash at Bill.com’s option at
any time, and from time to time, on or after October 5, 2024, but
only if the last reported sale price per share of Bill.com’s common
stock has been at least 130% of the conversion price then in effect
for a specified period of time.
The interest rate, conversion rate, offering price and other
terms are to be determined upon pricing of the notes.
Bill.com intends to use a portion of the net proceeds to pay the
cost of the capped call transactions described below. Bill.com
intends to use the remaining net proceeds for general corporate
purposes, which may include working capital, capital expenditures
and potential acquisitions and strategic transactions. From time to
time, Bill.com evaluates potential acquisitions and strategic
transactions involving businesses, technologies or products.
However, Bill.com has not designated any specific uses and has no
current agreements with respect to any acquisitions or strategic
transactions.
In connection with the pricing of the notes, Bill.com expects to
enter into capped call transactions with one or more of the initial
purchasers of the notes or their respective affiliates and/or other
financial institutions (the “option counterparties”). The capped
call transactions are expected generally to reduce the potential
dilution to the common stock upon any conversion of the notes
and/or offset any cash payments Bill.com is required to make in
excess of the principal amount of converted notes, as the case may
be, with such reduction and/or offset subject to a cap. If the
initial purchasers exercise their option to purchase additional
notes, Bill.com expects to enter into additional capped call
transactions with the option counterparties.
In connection with establishing their initial hedges of the
capped call transactions, the option counterparties and/or their
respective affiliates expect to purchase shares of the common stock
and/or enter into various derivative transactions with respect to
the common stock concurrently with or shortly after the pricing of
the notes. This activity could increase (or reduce the size of any
decrease in) the market price of the common stock or the notes at
that time.
In addition, the option counterparties and/or their respective
affiliates may modify their hedge positions by entering into or
unwinding various derivatives with respect to the common stock
and/or purchasing or selling the common stock or any other
securities of Bill.com in secondary market transactions following
the pricing of the notes and prior to the maturity of the notes
(and are likely to do so during any observation period related to a
conversion of notes/may do so following any conversion, repurchase
or redemption of the notes by Bill.com to the extent it exercises
the relevant election under the capped call transactions). This
activity could also cause or avoid an increase or a decrease in the
market price of the common stock or the notes, which could affect
the holder’s ability to convert the notes and, to the extent the
activity occurs during any observation period related to a
conversion of the notes, it could affect the number of shares and
the value of the consideration that the holder would receive upon
conversion of the notes.
If the initial purchasers exercise their option to purchase
additional notes, Bill.com may use the resulting additional
proceeds of the sale of the additional notes to pay the cost of
entering into the additional capped call transactions and for
general corporate purposes, which may include working capital,
capital expenditures and potential acquisitions and strategic
transactions.
This announcement is neither an offer to sell nor a solicitation
of an offer to buy any of these securities (including the shares of
the common stock, if any, into which the notes are convertible) and
shall not constitute an offer, solicitation or sale in any
jurisdiction in which such offer, solicitation or sale is unlawful.
Any offers of the notes will be made only by means of a private
offering memorandum.
The notes and any shares of the common stock issuable upon
conversion of the notes have not been registered under the Act, or
any state securities laws and may not be offered or sold in the
United States absent registration or an applicable exemption from
such registration requirements.
Cautionary Statement Regarding Forward-Looking Statements
This press release may include forward-looking statements within
the meaning of Section 27A of the Private Securities Litigation
Reform Act. Words such as “anticipate,” “believe,” “estimate,”
“expect,” “intend,” “should,” “will” and variations of these terms
or the negative of these terms and similar expressions are intended
to identify these forward-looking statements. Forward-looking
statements in this press release may include but are not limited to
statements regarding Bill.com’s proposed offering of the notes and
expected use of net proceeds of the offering. Factors that may
contribute to such differences include, but are not limited to,
risks related to whether Bill.com will consummate the offering of
the notes on the expected terms, or at all, the anticipated
principal amount of the notes, which could differ based upon market
conditions, whether the capped call transactions will become
effective, the expected use of the net proceeds from the offering,
which could change as a result of market conditions or for other
reasons, prevailing market and other general economic, industry or
political conditions in the United States or internationally, the
impact of COVID-19, and whether Bill.com will be able to satisfy
the conditions required to close any sale of the notes. The
foregoing list of risks and uncertainties is illustrative, but is
not exhaustive. For information about other potential factors that
could affect Bill.com’s business and financial results, please
review the “Risk Factors” described in Bill.com’s Annual Report on
Form 10-K for the fiscal year ended June 30, 2021 filed with the
Securities and Exchange Commission (the “SEC”) and in Bill.com’s
other filings with the SEC. These forward-looking statements speak
only as of the date hereof or as of the date otherwise stated
herein. Bill.com disclaims any obligation to update these
forward-looking statements.
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version on businesswire.com: https://www.businesswire.com/news/home/20210921005605/en/
IR Contact: Karen Sansot ksansot@hq.bill.com
Press Contact: Oriana Branon obranon@hq.bill.com
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