Summary
Take-Two Interactive Software, Inc. (TTWO) filed an 8-K on June 18, 2013, to report the consummation of its offering of $250 million aggregate principal amount of 1.00% Convertible Senior Notes due 2018. This significant financing event provides the company with capital, potentially for future growth initiatives, acquisitions, or general corporate purposes. The notes carry a low interest rate of 1.00% and are convertible into shares of common stock at an initial conversion price of approximately $21.52 per share, subject to adjustments. This convertible nature offers potential upside for bondholders if the company's stock price appreciates, while also providing a debt instrument for the company with a manageable interest burden.
Key Highlights
- 1Consummation of a $250 million offering of 1.00% Convertible Senior Notes due 2018.
- 2The offering includes an option for underwriters to purchase an additional $37.5 million for over-allotments.
- 3The Notes are senior unsecured obligations, ranking equally with existing unsubordinated debt.
- 4Interest rate on the Notes is a low 1.00% per year, payable semi-annually.
- 5Maturity date for the Notes is July 1, 2018.
- 6Notes are convertible into shares of common stock, cash, or a combination, with an initial conversion rate of 46.4727 shares per $1,000 principal, implying a conversion price of approximately $21.52.
- 7A make-whole premium may be paid by the company for conversions in connection with certain fundamental changes.
- 8The company does not have the right to redeem the Notes prior to maturity.