Applied Digital Corporation Announces Upsize and Pricing of $375 Million Convertible Notes Offering

On October 31, 2024, Applied Digital Corporation disclosed that it had issued a press release outlining the upsize and pricing of its private offering. The offering entailed $375 million aggregate principal amount of its 2.75% Convertible Senior Notes due 2030, known as the “Convertible Notes.” These notes were designated for sale to qualified institutional buyers under Rule 144A of the Securities Act of 1933. Additionally, the Company granted the initial purchasers of the Convertible Notes an option to purchase up to an additional $75 million aggregate principal amount of the notes within a 13-day period beginning from the issuance date. The expected closing date for this offering is November 4, 2024, upon meeting customary closing conditions.

The estimated net proceeds from the offering are approximately $361.8 million, with a potential increase to approximately $434.5 million if the initial purchasers opt to exercise their full option to purchase additional Convertible Notes. Following deductions for discounts, commissions, and offering expenses, Applied Digital intends to allocate portions of the net proceeds towards capped call transactions, prepaid forward transactions, share repurchases, and general corporate purposes.

The Convertible Notes are senior unsecured obligations scheduled to accrue interest at a rate of 2.75% per annum, payable semi-annually beginning June 1, 2025. They are set to mature on June 1, 2030, with conversion options available under certain conditions. The conversion rate initially stands at 102.5431 shares of common stock per $1,000 principal amount of Convertible Notes.

Applied Digital’s strategy includes utilizing a portion of the net proceeds to fund share repurchases, capped call transactions, prepaid forward transactions, and general corporate endeavors. These financial moves are intended to optimize shareholder value through strategic fund allocation.

The Company has ensured necessary legal disclosures, stating that the information shared is not an offer to sell or a solicitation to buy any securities. These statements are meticulously crafted to adhere to due legal diligence and are in no way intended to mislead stakeholders or potential investors.

This press release underscores Applied Digital Corporation’s commitment to financial transparency, strategic growth, and responsible capital management as it navigates through this significant financial transaction.

Overall, Applied Digital continues to demonstrate forward-thinking financial maneuvers to fortify its financial position and support its long-term growth objectives.

This article was generated by an automated content engine and was reviewed by a human editor prior to publication. For additional information, read Applied Digital’s 8K filing here.

Applied Digital Company Profile

Applied Digital Corporation designs, develops, and operates datacenters in North America. Its datacenters provide digital infrastructure solutions to the high-performance computing industry. The company also provides artificial intelligence cloud services, high performance computing datacenter hosting, and crypto datacenter hosting services.