Summary
Motorola Solutions, Inc. announced a significant event on September 5, 2018, concerning its 2.0% Convertible Senior Notes due 2020. The company has agreed to repurchase $200 million in principal amount of these notes from a holder affiliated with Silver Lake Partners. This transaction is notable as it involves a premium over the principal amount, indicating the market's perception of the value embedded in these convertible notes and the underlying common stock. The repurchase will be funded through a combination of existing credit facilities, new debt financing, and existing cash on the balance sheet. This move suggests a strategic decision by Motorola Solutions to manage its debt structure and potentially reduce future dilution from the conversion of these notes. Investors will want to monitor the impact of this transaction on the company's leverage ratios and its overall capital allocation strategy.
Key Highlights
- 1Motorola Solutions is repurchasing $200 million in principal of its 2.0% Convertible Senior Notes due 2020.
- 2The repurchase is from an investment fund affiliated with Silver Lake Partners.
- 3The aggregate consideration for the repurchase is approximately $368.86 million, indicating a premium paid by the company.
- 4Settlement of the transaction is expected by October 17, 2018.
- 5Funding for the repurchase will come from existing credit facilities, new debt, and cash on hand.
- 6This action may signal a management view on the valuation of the company or a strategy to manage convertible debt obligations.