Summary
This Form 8-K filing from Workday, Inc. (WDAY) on June 24, 2013, details the closing of the sale of additional convertible senior notes and related hedging transactions. Specifically, Workday closed the sale of $40 million aggregate principal amount of 0.75% Convertible Senior Notes due 2018 and $30 million aggregate principal amount of 1.50% Convertible Senior Notes due 2020. These additional notes were purchased by the initial purchasers who had exercised their option to buy more. The filing also outlines the accompanying convertible note hedge transactions and warrant transactions entered into by Workday on June 20, 2013, with counterparties. These derivative transactions are designed to mitigate potential dilution to Workday's Class A Common Stock resulting from the conversion of these notes. The hedge transactions aim to reduce dilution, while the warrant transactions, if exercised, could have a dilutive effect.
Key Highlights
- 1Workday closed the sale of an additional $40 million in 0.75% Convertible Senior Notes due 2018 and $30 million in 1.50% Convertible Senior Notes due 2020 on June 24, 2013.
- 2These additional notes were issued to initial purchasers who exercised their overallotment option.
- 3The sale of these additional notes was conducted as a private placement under Section 4(2) of the Securities Act and Rule 144A.
- 4Workday entered into convertible note hedge transactions to reduce potential dilution from the conversion of these additional notes.
- 5Concurrently, Workday also entered into warrant transactions which, if the stock price exceeds the strike price, could be dilutive.
- 6The net proceeds from the sale of the additional notes were approximately $68.3 million, after deducting discounts and including accrued interest.
- 7The hedge and warrant transactions were entered into on June 20, 2013, with the same counterparties involved in the initial offering.