ADTRAN prices $175 million convertible notes offering due 2030

ADTRAN Holdings Inc. (NASDAQ: ADTN) announced the pricing of $175 million in 3.75% convertible senior notes due 2030, increasing from the previously announced $150 million offering size. The notes will be sold to qualified institutional buyers in a private placement scheduled to settle on September 19, 2025.

The notes will mature on September 15, 2030, with interest paid semi-annually beginning March 15, 2026. The initial conversion rate is set at 86.8206 shares per $1,000 principal amount, representing a conversion price of approximately $11.52 per share. This represents a 30% premium over the company's stock price of $8.86 per share on September 16, 2025.

Initial purchasers received an option to buy an additional $26.25 million in notes within 13 days of issuance. The company estimates net proceeds of approximately $168.1 million, or $193.4 million if the full option is exercised.

ADTRAN plans to use approximately $15.3 million of proceeds for capped call transactions and the remainder to repay borrowings under its Wells Fargo Credit Agreement dated July 18, 2022. The company will repay approximately $152.8 million in outstanding debt and cover fees associated with the Sixth Amendment to the credit agreement dated September 16, 2025.

The convertible notes include standard provisions allowing conversion under certain conditions before June 15, 2030, and unrestricted conversion thereafter until maturity. The company may redeem the notes starting September 20, 2028, if its stock price exceeds 130% of the conversion price for a specified period.

ADTRAN entered into capped call transactions with financial institutions to reduce potential dilution from note conversions. The cap price is set at approximately $15.51 per share, representing a 75% premium over the current stock price.

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