8-KOther EventsExhibits & Filings

ServiceNow, Inc. 8-K Report, Corporate Update (May 24, 2017)

Filed May 24, 2017For Securities:NOW

Summary

ServiceNow, Inc. (NOW) announced on May 23, 2017, the pricing of $750 million in aggregate principal amount of 0% Convertible Senior Notes due 2022. The company also provided an option for the initial purchasers to buy an additional $112.5 million in notes to cover over-allotments, potentially bringing the total issuance to $862.5 million. These notes are being offered to qualified institutional buyers under Rule 144A of the Securities Act of 1933. This offering represents a significant capital raise for ServiceNow, likely intended to fund future growth initiatives, strategic investments, or general corporate purposes. Investors should note the zero-coupon nature of the notes, which implies that their return will be solely derived from the conversion feature or the principal repayment at maturity, rather than periodic interest payments.

Key Highlights

  • 1ServiceNow priced $750 million in 0% Convertible Senior Notes due 2022.
  • 2An over-allotment option for an additional $112.5 million in notes was granted.
  • 3The total potential issuance could reach $862.5 million.
  • 4The notes are being sold to qualified institutional buyers under Rule 144A.
  • 5The notes carry a 0% coupon rate, meaning no regular interest payments will be made.
  • 6The offering was announced on May 23, 2017.

Frequently Asked Questions

The filing does not explicitly state the purpose of the note issuance. However, such capital raises are typically used for general corporate purposes, funding growth initiatives, potential acquisitions, or strengthening the company's balance sheet.

It means that these notes do not pay periodic interest (coupon payments). The investors' return will primarily come from the potential conversion of the notes into ServiceNow's common stock if the stock price rises above a certain threshold, or from receiving the principal amount back at maturity. This structure is attractive to companies seeking to raise capital without immediate cash outflows for interest payments.

The notes are being offered to 'qualified institutional buyers' pursuant to Rule 144A under the Securities Act of 1933. This means they are not available to the general public but are intended for large, sophisticated institutional investors.

The over-allotment option allows the initial purchasers to buy an additional $112.5 million of notes if there is strong demand. This could increase the total capital raised by ServiceNow to $862.5 million and provides flexibility for the underwriters to stabilize the market price of the notes shortly after issuance.