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Fastly (NYSE: FSLY) announced the issuance of $150.0 million in 7.75% convertible senior notes due 2028. The company will use these proceeds to repurchase approximately $157.9 million of its existing 0.00% Convertible Senior Notes due 2026. The new notes will mature on June 1, 2028, with interest payable semi-annually at 7.75%. The initial conversion rate is 50.6586 shares per $1,000 principal amount, equivalent to a conversion price of $19.74 per share. After the transactions, expected to settle around December 5, 2024, the outstanding amount of existing notes will be $188.6 million.
Fastly (NYSE: FSLY) ha annunciato l’emissione di note senior convertibili del valore di $150.0 milioni con un tasso del 7.75% e scadenza nel 2028. La società utilizzerà queste entrate per riacquistare circa $157.9 milioni delle sue note senior convertibili esistenti con un tasso dello 0.00% in scadenza nel 2026. Le nuove note scadranno il 1° giugno 2028, con interessi pagabili semestralmente al 7.75%. Il tasso di conversione iniziale è di 50.6586 azioni per un importo principale di $1.000, equivalente a un prezzo di conversione di $19.74 per azione. Dopo le transazioni, che dovrebbero chiudersi intorno al 5 dicembre 2024, l’importo totale delle note esistenti sarà di $188.6 milioni.
Fastly (NYSE: FSLY) anunció la emisión de notas senior convertibles por un valor de $150.0 millones con un interés del 7.75% y vencimiento en 2028. La compañía utilizará estos fondos para recomprar aproximadamente $157.9 millones de sus notas senior convertibles existentes con un interés del 0.00% que vencen en 2026. Las nuevas notas vencerán el 1 de junio de 2028, con intereses pagaderos semestralmente al 7.75%. La tasa de conversión inicial es de 50.6586 acciones por cada $1,000 de monto principal, lo que equivale a un precio de conversión de $19.74 por acción. Tras las transacciones, que se espera se cierren alrededor del 5 de diciembre de 2024, el monto pendiente de las notas existentes será de $188.6 millones.
패스트리 (NYSE: FSLY)가 2028년 만기 7.75% 전환선순위채권을 1억 5천만 달러 발행했다고 발표했습니다. 회사는 이 자금을 사용하여 기존 0.00% 전환선순위채권(2026년 만기) 약 1억 5천79백만 달러를 재매입할 예정입니다. 새로운 채권은 2028년 6월 1일 만기가 되며, 이자는 반기마다 7.75%로 지급됩니다. 초기 전환비율은 1,000달러의 원금에 대해 50.6586주에 해당하며, 이는 주당 19.74달러의 전환가로 환산됩니다. 거래가 완료되면, 2024년 12월 5일 경 종료될 것으로 예상되며, 기존 채권의 미상환 금액은 1억 8,860만 달러가 될 것입니다.
Fastly (NYSE: FSLY) a annoncé l’émission de 150 millions de dollars d’obligations senior convertibles à 7,75% avec échéance en 2028. La société utilisera ces fonds pour racheter environ 157,9 millions de dollars de ses obligations senior convertibles existantes à 0,00% arrivant à échéance en 2026. Les nouvelles obligations arriveront à échéance le 1er juin 2028, avec des intérêts payables semestriellement à 7,75%. Le taux de conversion initial est de 50,6586 actions pour un montant principal de 1 000 dollars, soit un prix de conversion de 19,74 dollars par action. Après les transactions, qui devraient se régler autour du 5 décembre 2024, le montant restant des obligations sera de 188,6 millions de dollars.
Fastly (NYSE: FSLY) gab die Emission von 150 Millionen USD in 7,75% wandelbaren nachrangigen Anleihen mit Fälligkeit 2028 bekannt. Das Unternehmen wird die Erlöse verwenden, um etwa 157,9 Millionen USD seiner bestehenden 0,00% wandelbaren nachrangigen Anleihen mit Fälligkeit 2026 zurückzukaufen. Die neuen Anleihen haben eine Laufzeit bis zum 1. Juni 2028, die Zinsen sind halbjährlich zu 7,75% fällig. Der anfängliche Wandelkurs beträgt 50,6586 Aktien pro 1.000 USD Nennwert, was einem Wandlungspreis von 19,74 USD pro Aktie entspricht. Nach den Transaktionen, die voraussichtlich am 5. Dezember 2024 abgeschlossen werden sollen, wird der ausstehende Betrag der bestehenden Anleihen 188,6 Millionen USD betragen.
Positive
- Successful refinancing of existing debt with new convertible notes
- Repurchasing $157.9M of existing notes for $150.0M, resulting in $7.9M debt reduction
Negative
- Higher interest rate on new notes (7.75%) compared to existing notes (0.00%)
- Potential dilution risk for shareholders due to conversion features
Insights
This debt restructuring represents a significant financial move for Fastly. The company is effectively replacing $157.9M of zero-interest convertible notes with $150M of 7.75% notes, extending maturity from 2026 to 2028. While this provides immediate cash management benefits, the new higher interest rate will create an annual interest expense of approximately $11.6M.
The new notes’ conversion price of $19.74 represents a 100% premium to current stock price, indicating confidence in future growth potential. However, the transaction suggests Fastly is willing to accept higher borrowing costs to manage its debt structure. The concurrent share purchase arrangement with JWCA could help stabilize the stock price during this transition period.
The refinancing terms reveal important market dynamics. Converting from zero-coupon to interest-bearing notes at 7.75% reflects current higher interest rate environment and possibly Fastly’s credit position. The $7.9M principal reduction through the exchange ($157.9M to $150M) partially offsets the new interest burden.
The lack of early redemption options and the inclusion of fundamental change protections are standard but important features that protect both the company and noteholders. The conversion ratio structure provides significant upside participation while protecting against immediate dilution.
SAN FRANCISCO–(BUSINESS WIRE)– Fastly, Inc. (NYSE: FSLY), a leader in global edge cloud platforms, today announced that on December 2, 2024, it entered into separate, privately negotiated subscription agreements pursuant to which Fastly will issue (the “Issuance”) $150.0 million aggregate principal amount of its 7.75% convertible senior notes due 2028 (the “2028 Notes”). Fastly estimates that the gross proceeds from the Issuance will be $150.0 million. Fastly intends to use $150.0 million of the gross proceeds from the Issuance to repurchase approximately $157.9 million aggregate principal amount of its existing 0.00% Convertible Senior Notes due 2026 (the “Existing Convertible Notes”). Additionally, on December 2, 2024, Fastly entered into separate, privately negotiated repurchase agreements with a limited number of holders of its Existing Convertible Notes to repurchase (the “Repurchases” and together with the Issuance, the “Transactions”) approximately $157.9 million aggregate principal amount of the Existing Convertible Notes for aggregate cash consideration of $150.0 million. The Transactions are expected to settle on or about December 5, 2024, subject to customary closing conditions.
Upon completion of the Transactions, the aggregate principal amount of the Existing Convertible Notes outstanding will be approximately $188.6 million, and the aggregate principal amount of the 2028 Notes outstanding will be $150.0 million.
The 2028 Notes will be senior, unsecured obligations of Fastly and will accrue interest at a rate of 7.75% per annum, payable semi-annually in arrears on June 1 and December 1 of each year, beginning on June 1, 2025. The 2028 Notes will mature on June 1, 2028, unless earlier converted or repurchased.
The 2028 Notes will be convertible at the option of the noteholders in certain circumstances. Upon conversion, Fastly will pay or deliver, as the case may be, cash, shares of Fastly’s Class A common stock (the “common stock”) or a combination of cash and shares of common stock, at its election. The initial conversion rate is 50.6586 shares of common stock per $1,000 principal amount of 2028 Notes (equivalent to an initial conversion price of approximately $19.74 per share of common stock, which represents a conversion premium of approximately 100% to the last reported sale price of the common stock on The New York Stock Exchange on December 2, 2024), and will be subject to customary anti-dilution adjustments.
The 2028 Notes will not be redeemable by Fastly prior to the maturity date, and no “sinking fund” will be provided for the 2028 Notes.
If Fastly undergoes a “fundamental change” (as defined in the indenture for the 2028 Notes), subject to certain conditions and limited exceptions, noteholders may require Fastly to repurchase for cash all or any portion of their notes at a repurchase price equal to 100% of the principal amount of the 2028 Notes to be repurchased, plus accrued and unpaid interest, if any, to, but excluding, the fundamental change repurchase date. In addition, following certain corporate events that occur prior to the maturity date of the 2028 Notes, Fastly will, in certain circumstances, increase the conversion rate of the notes for a noteholder who elects to convert its notes in connection with such a corporate event.
Fastly expects that some or all of the holders of the Existing Convertible Notes that are repurchased by Fastly in the Repurchases may purchase shares of Fastly’s common stock in open market transactions or enter into or unwind various derivatives with respect to Fastly’s common stock to unwind hedge positions that they have with respect to their investments in the Existing Convertible Notes. Fastly also expects that some or all holders of the 2028 Notes may sell shares of Fastly’s common stock in open market transactions or enter into various derivatives with respect to Fastly’s common stock to hedge their investments in the 2028 Notes. These transactions may cause or avoid an increase or decrease in the market price of Fastly’s common stock, and the effect of which may be material.
In connection with the Transactions, Fastly has been advised that J. Wood Capital Advisors LLC (“JWCA”), Fastly’s financial advisor with respect to the Transactions, intends to purchase approximately 1.3 million shares of Fastly’s common stock concurrently with the Transactions in privately negotiated transactions from certain purchasers of the 2028 Notes through a financial intermediary at a discount to the last reported sale price of Fastly’s common stock on December 2, 2024. JWCA has also agreed not to sell such shares of common stock for 60 days. Such concurrent purchases by JWCA of Fastly’s common stock could increase (or reduce the size of any decrease in) the market price of Fastly’s common stock or the 2028 Notes.
The Issuance and any common stock issuable upon conversion of the 2028 Notes have not been, and will not be, registered under the Securities Act of 1933, as amended (the “Securities Act”), or any other securities laws, and the 2028 Notes and any such common stock cannot be offered or sold except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and any other applicable securities laws. This press release does not constitute an offer to sell, or the solicitation of an offer to buy, the Existing Convertible Notes, the 2028 Notes or any common stock issuable upon conversion of the 2028 Notes, nor will there be any sale of the 2028 Notes or any such common stock, in any state or other jurisdiction in which such offer, sale or solicitation would be unlawful.
About Fastly, Inc.
Fastly’s powerful and programmable edge cloud platform helps the world’s top brands deliver online experiences that are fast, safe, and engaging through edge compute, delivery, security, and observability offerings that improve site performance, enhance security, and empower innovation at global scale. Compared to other providers, Fastly’s powerful, high-performance, and modern platform architecture empowers developers to deliver secure websites and apps with rapid time-to-market and demonstrated, industry-leading cost savings. Organizations around the world trust Fastly to help them upgrade the internet experience, including Reddit, Neiman Marcus, Universal Music Group, and SeatGeek.
Forward-Looking Statements
This press release contains “forward-looking” statements that are based on our beliefs and assumptions and on information currently available to us on the date of this press release. Forward-looking statements may involve known and unknown risks, uncertainties, and other factors that may cause our actual results, performance, or achievements to be materially different from those expressed or implied by the forward-looking statements. These statements include, but are not limited to, statements related to the 2028 Notes to be issued and the Existing Convertible Notes to be repurchased, the completion, timing and size of the Issuance and/or the Repurchases, the impact of the Issuance and/or the Repurchases on the market price of the common stock, and JWCA’s expected purchase of Fastly’s common stock and the effects of such purchase. Among the factors that could cause actual results to differ materially from those indicated in the forward-looking statements are the satisfaction of the closing conditions related to the Issuance and/or the Repurchases and market conditions. Except as required by law, we assume no obligation to update these forward-looking statements publicly or to update the reasons actual results could differ materially from those anticipated in the forward-looking statements, even if new information becomes available in the future. Important factors that could cause our actual results to differ materially are detailed from time to time in the reports Fastly files with the Securities and Exchange Commission (“SEC”), including without limitation Fastly’s Annual Report on Form 10-K for the year ended December 31, 2023 and our Quarterly Reports on Form 10-Q for the quarters ended June 30, 2024 and September 30, 2024. Copies of reports filed with the SEC are posted on Fastly’s website and are available from Fastly without charge.
Source: Fastly, Inc.
View source version on businesswire.com: https://www.businesswire.com/news/home/20241202598767/en/
Investor Contact
Vernon Essi, Jr.
Media Contact
Spring Harris
Source: Fastly, Inc.
FAQ
What is the interest rate of Fastly’s (FSLY) new 2028 convertible notes?
Fastly’s new 2028 convertible notes carry an interest rate of 7.75% per annum, payable semi-annually.
What is the conversion price for Fastly’s (FSLY) 2028 convertible notes?
The initial conversion price is approximately $19.74 per share, representing a 100% premium to the stock’s last reported sale price on December 2, 2024.
How much of Fastly’s (FSLY) existing 2026 notes will remain outstanding after the transaction?
After the transaction, approximately $188.6 million of the existing 2026 convertible notes will remain outstanding.
