8-KMaterial AgreementsFinancial EventsSecurities & Listing+1

GLOBAL PAYMENTS INC 8-K Report, Material Agreement (Feb 23, 2024)

Filed February 23, 2024For Securities:GPN

Summary

Global Payments Inc. (GPN) announced on February 23, 2024, the successful closing of a $2.00 billion offering of 1.50% Convertible Senior Notes due 2031. The company utilized approximately $1.96 billion in net proceeds to strategically repurchase shares of its common stock, fund capped call transactions designed to mitigate potential dilution, and intends to use the remaining proceeds for debt repayment, including its commercial paper program and revolving credit facility, as well as for general corporate purposes. The Notes bear a 1.50% annual interest rate, payable semi-annually, and mature on March 1, 2031. They are convertible into cash and/or shares of GPN's common stock under specific conditions and periods, with an initial conversion rate of 6.3710 shares per $1,000 principal amount, implying an initial conversion price of approximately $156.96 per share. The company also secured capped call transactions costing $254 million to manage potential equity dilution and conversion obligations.

Key Highlights

  • 1Global Payments Inc. successfully closed a $2.00 billion offering of 1.50% Convertible Senior Notes due 2031.
  • 2The company used a portion of the net proceeds to repurchase 1,414,759 shares of its Common Stock.
  • 3Approximately $1.96 billion in net proceeds were raised, with funds earmarked for debt repayment and general corporate purposes.
  • 4The Notes are convertible into cash and/or shares of GPN's common stock, with an initial conversion rate of 6.3710 shares per $1,000 principal.
  • 5Capped call transactions costing $254 million were entered into to reduce potential dilution associated with the convertible notes.
  • 6The Notes are senior unsecured obligations and rank structurally junior to subsidiaries' indebtedness.
  • 7The company may not redeem the Notes prior to March 6, 2028, but can redeem them on or after that date under certain circumstances.

Frequently Asked Questions

The primary purposes include raising capital for general corporate needs, repaying existing debt under its commercial paper program and revolving credit facility, and managing the potential dilution from the convertible notes through capped call transactions. A portion of the proceeds was also used to repurchase company stock.

The notes are convertible into GPN's common stock. However, the company has entered into capped call transactions that are designed to offset potential dilution to shareholders if the notes are converted. The effectiveness of these capped calls is subject to certain conditions and a cap price of $228.90 per share.

The notes carry a fixed interest rate of 1.50% per year, payable semi-annually. They mature on March 1, 2031, unless earlier repurchased, redeemed, or converted.

The initial conversion rate is 6.3710 shares of Common Stock per $1,000 principal amount of Notes, which equates to an initial conversion price of approximately $156.96 per share.