8-KMaterial AgreementsFinancial EventsSecurities & Listing+2

Lumentum Holdings Inc. 8-K Report, Material Agreement (Dec 12, 2019)

Filed December 12, 2019For Securities:LITE

Summary

Lumentum Holdings Inc. (LITE) announced on December 12, 2019, the issuance of $900 million in aggregate principal amount of 0.50% Convertible Senior Notes due 2026. The offering was conducted as a private placement to qualified institutional buyers under Rule 144A. Net proceeds of approximately $892.5 million were generated, with a significant portion ($196 million) used to repay outstanding term loan credit facility debt. Additionally, roughly $200 million was used to repurchase the Company's common stock concurrently with the offering. The remaining proceeds are earmarked for general corporate purposes, including capital expenditures, working capital, and potential acquisitions. The convertible notes carry a low annual interest rate of 0.50% and mature in December 2026. The conversion rate is initially set at 10.0711 shares per $1,000 principal amount, implying a conversion price of approximately $99.29 per share, subject to adjustments. This issuance represents a strategic move to refinance debt and return capital to shareholders while maintaining flexibility for future growth initiatives.

Key Highlights

  • 1Lumentum issued $900 million of 0.50% Convertible Senior Notes due 2026.
  • 2The offering was a private placement to qualified institutional buyers (Rule 144A).
  • 3Net proceeds of approximately $892.5 million were raised.
  • 4Used $196 million to fully repay the term loan credit facility.
  • 5Repurchased approximately $200 million of common stock concurrently with the offering.
  • 6Remaining proceeds are designated for general corporate purposes, including potential acquisitions.
  • 7The notes are senior unsecured obligations, ranking equally with existing senior unsecured debt.

Frequently Asked Questions

The primary purposes include refinancing existing debt (term loan facility), returning capital to shareholders through stock repurchases, and providing funds for general corporate purposes such as capital expenditures, working capital, and potential acquisitions.

$196 million of the term loan credit facility was repaid. Approximately $200 million of Lumentum's common stock was repurchased concurrently with the note offering.

The notes have a principal amount of $900 million, a 0.50% annual interest rate, and mature on December 15, 2026. The initial conversion rate is 10.0711 shares per $1,000 principal amount, equating to an initial conversion price of approximately $99.29 per share.

The remaining net proceeds are intended for general corporate purposes, which may include capital expenditures, working capital needs, and financing potential future acquisitions.