Exhibit 99.1
Guidewire Software, Inc. Announces Proposed Convertible Senior Notes Offering
October 15, 2024
SAN MATEO, Calif.(BUSINESS
WIRE)Oct. 15, 2024 Guidewire Software, Inc. (NYSE: GWRE) today announced its intention to offer, subject to market and other conditions, $500.0 million aggregate principal amount of convertible senior notes due 2029 (the
notes) in a private offering to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the Securities Act). Guidewire also expects to grant the
initial purchasers of the notes an option to purchase, for settlement within a period of 13 days from, and including, the date 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 Guidewire, will accrue interest payable semi-annually in arrears and will mature on November 1, 2029,
unless earlier repurchased, redeemed or converted. Noteholders will have the right to convert their notes in certain circumstances and during specified periods. Guidewire will settle conversions in cash or a combination of cash and shares of its
common stock, at Guidewires election.
The notes will be redeemable, in whole or in part (subject to certain limitations), for cash at
Guidewires option at any time, and from time to time, on or after November 5, 2027 and on or before the 20th scheduled trading day immediately before the maturity date, but only if the last reported sale price per share of
Guidewires common stock exceeds 130% of the conversion price for a specified period of time and certain other conditions are satisfied. The redemption price will be equal to the principal amount of the notes to be redeemed, plus accrued and
unpaid interest, if any, to, but excluding, the redemption date.
If certain corporate events that constitute a fundamental change occur,
then, subject to a limited exception, noteholders may require Guidewire to repurchase their notes for cash. The repurchase price will be equal to the principal amount of the notes to be repurchased, plus accrued and unpaid interest, if any, to, but
excluding, the applicable repurchase date.
The interest rate, initial conversion rate and other terms of the notes will be determined at the pricing of
the offering.
Guidewire intends to use a portion of the net proceeds from the offering to fund the cost of entering into the capped call transactions
described below. Guidewire intends to use a portion of the net proceeds from the offering to retire a portion of its outstanding 1.25% Convertible Senior Notes due March 2025 (the 2025 Notes) in privately negotiated transactions
concurrently with the pricing of the offering. Guidewire intends to use the remainder of the net proceeds from the offering for general corporate purposes, which may include the redemption of the remaining outstanding 2025 Notes. If the initial
purchasers exercise their option to purchase additional notes, then Guidewire intends to use a portion of the additional net proceeds to fund the cost of entering into additional capped call transactions as described below.
In connection with the retirement of a portion of the 2025 Notes, Guidewire expects some or all of the holders of the 2025 Notes that Guidewire will retire
may enter into or unwind various derivatives with respect to Guidewires common stock and/or purchase shares of Guidewires common stock concurrently with or shortly after the pricing of the notes. In particular, Guidewire expects that
many holders of the 2025 Notes employ a convertible arbitrage strategy with respect to the 2025 Notes and have a short position with respect to Guidewires common stock that they would close out through purchases of Guidewires common
stock and/or the unwinding of various derivatives with respect to Guidewires common stock, as the case may be, in connection with Guidewires retirement of the 2025 Notes. The retirement of the 2025 Notes, and the potential related market
activities by selling holders of the 2025 Notes (such as purchases of shares of Guidewires common stock that Guidewire expects to occur in connection with the retirement transactions), could increase (or reduce the size of any decrease in) the
market price of Guidewires common stock, which may also affect the trading price of the notes at that time. This activity could affect the market price of Guidewires common stock concurrently with the pricing of the notes, and could
result in a higher effective conversion price for the notes Guidewire is offering.
In connection with the pricing of the notes, Guidewire expects to
enter into privately negotiated capped call transactions with one or more of the initial purchasers or their affiliates and/or one or more other financial institutions (the option counterparties). The capped call transactions are
expected to cover, subject to anti-dilution adjustments substantially similar to those applicable to the notes, the number of shares of Guidewires common stock that will initially underlie the notes. If the initial purchasers exercise their
option to purchase additional notes, then Guidewire expects to enter into additional capped call transactions with the option counterparties.
The capped
call transactions are expected generally to reduce the potential dilution to Guidewires common stock upon any conversion of the notes and/or offset any potential cash payments Guidewire is required to make in excess of the principal amount of
converted notes, as the case may be. If, however, the market price per share of Guidewires common stock, as measured under the terms of the capped call transactions, exceeds the cap price of the capped call transactions, there would
nevertheless be dilution and/or there would not be an offset of such potential cash payments, in each case, to the extent that such market price exceeds the cap price of the capped call transactions.
In connection with establishing their initial hedges of the capped call
transactions, the option counterparties or their respective affiliates expect to enter into various derivative transactions with respect to Guidewires common stock and/or purchase shares of Guidewires 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 Guidewires common stock or the market value of the notes at that time.
In addition, the option counterparties or their respective affiliates may modify their hedge positions by entering into or unwinding various derivatives with
respect to Guidewires common stock and/or purchasing or selling Guidewires common stock or other securities of Guidewire in secondary market transactions following the pricing of the notes and prior to the maturity of the notes (and
(x) are likely to do so during any observation period related to a conversion of notes or following any repurchase of the notes by Guidewire in connection with any redemption or fundamental change and (y) are likely to do so following any
repurchase of the notes by Guidewire other than in connection with any redemption or fundamental change if Guidewire elects to unwind a corresponding portion of the capped call transactions in connection with such repurchase). This activity could
also cause or avoid an increase or decrease in the market price of Guidewires common stock or the notes, which could affect noteholders ability to convert the notes and, to the extent the activity occurs during any observation period
related to a conversion of notes, it could affect the amount and value of the consideration that noteholders will receive upon conversion of the notes.