Axon Enterprise proposes $1 billion convertible notes offering
The company has also amended its credit agreement with JPMorgan Chase Bank to raise its revolving credit facility to $500 million
Published
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Axon Enterprise plans to offer $1.0 billion in convertible senior notes due 2031, carrying a 0% coupon. Underwriters will have the option to buy up to an additional $150.0 million of the notes to cover over-allotments.
Alongside the offering, Axon has signed a second amendment to its credit agreement with JPMorgan Chase Bank as administrative agent. The amendment is expected to raise the company's revolving credit facility from $300.0 million to $500.0 million and extend its maturity date. It only takes effect once the notes offering closes.
Axon will use part of the proceeds to fund capped call transactions, a step meant to offset the potential dilution that convertible notes can create for existing shareholders. The rest of the money will go toward general corporate purposes, including possible acquisitions or investments.
With no coupon payments due on the notes and a larger revolving credit line in place, Axon is adding to the cash it has available to spend without an immediate cost of borrowing. For investors, the capped calls limit how much new shares could be diluted if the notes convert, while the larger credit facility gives Axon more room to fund deals should it choose to pursue them.