NortonLifeLock extends convertibles a year, exchanges $875 million to facilitate special dividend

By Wendy Van Sickle

Columbus, Ohio, Feb. 5 – NortonLifeLock Inc., formerly known as Symantec Corp., executed amendments to two series of convertible notes and two exchanges of convertibles to accommodate a special dividend, according to an 8-K filing with the Securities and Exchange Commission.

On Jan. 30, the company amended the indentures of the 2.5% convertible notes due 2021 and the 2% convertibles due 2021 to extend the maturity dates by one year to April 1, 2022 and Aug. 15, 2022, respectively.

Additionally, the indentures were amended to

• Limit the right of the holders of the existing notes to convert the notes prior to the date that is six months prior to the extended maturity date;

• Remove the company’s redemption right;

• Remove the holders’ put option in the year preceding the maturity date; and

• Revise the prices and adjustments that apply in the event of a make-whole fundamental change to account for the extension of the maturity of the notes and to account for the conversion price adjustment.

On Nov. 11, it was agreed that, following payment by NortonLifeLock of a special dividend of $12.00 per share to the holders of its common stock on Jan. 31, the company would make a payment of $12.00 for each share underlying $250 million of the $500 million of outstanding 2.5% notes and $625 million of the $1.25 billion of outstanding 2% notes, in each case in lieu of the adjustment to the conversion price of those notes that would otherwise result from the special dividend. The remaining notes would receive the conversion price adjustment.

As a result, on Wednesday, the company exchanged $250 million of the 2.5% notes due 2021 and $625 million of the 2% notes due 2021 for new notes, which have substantially the same terms as the notes for which they were exchanged, except with respect to adjustments to the conversion price and the prices and adjustments that apply in the event of a make-whole fundamental change.

The new notes are convertible into cash, shares of common stock or a combination of cash and common stock, at the company’s option, at an initial conversion rate per $1,000 principal amount of 59.6341 for the 2.5% notes, which represents an initial conversion price of $16.7689 per share, and, for the 2% notes, 48.986 for an initial conversion price of $20.4140 per share.

Holders of new notes that are converted in connection with a make-whole fundamental change are, under some circumstances, entitled to an increase in the conversion rate for such new notes based on the effective date of such event and the applicable price attributable to the event.

A make-whole fundamental change includes a sale of substantially all the company’s assets, a change of the control of the company by way of a tender offer, merger or similar event, and the adoption of a plan relating to the company’s liquidation or dissolution.

Tempe, Ariz.-based NortonLifeLock is a cyber security company.

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