Bandwidth will buy back $65 million more convertibles due 2026

By Mary-Katherine Stinson

Lexington, Ky., March 1 –Bandwidth Inc. has entered into separate, privately negotiated repurchase agreements with a limited number of holders of its 0.25% convertible senior notes due 2026 to repurchase $65 million aggregate principal amount of the notes at approximately a 22% discount to par value, according to a press release and an 8-K filing with the Securities and Exchange Commission.

The repurchase will be funded with cash with the price based in part on the daily volume-weighted average price per share of Bandwidth’s class A common stock over a two consecutive trading day measurement period beginning on March 1.

The transaction is expected to close March 6 subject to customary closing conditions.

Bandwidth previously entered into capped call transactions with certain financial institutions in connection with the notes. All of these transactions are expected to remain in effect notwithstanding the repurchases.

The $65 million buyback follows a $160 million purchase at an approximate 29% discount which closed Nov. 28.

After closing, this latest buyback reduces the outstanding balance to $175 million from the original $400 million.

“This latest opportunistic repurchase at a substantial discount to par value, following the $160 million repurchased in November 2022, further strengthens our balance sheet, and our 2026 convertible notes outstanding have been reduced by more than 55%,” Bandwidth chief executive officer David Morken said in the press release.

Bandwidth has previously entered capped call transactions with certain financial institutions in connection with the notes. All of these transactions are expected to remain in effect.

Bandwidth is a Raleigh, N.C.-based software company.

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