Street Calls of the Week
HUNTSVILLE, Ala. - ADTRAN Holdings, Inc. (NASDAQ:ADTN and FSE:QH9), a networking solutions provider with a market capitalization of $829 million and annual revenue of $983 million, announced Monday its intention to offer $150 million in convertible senior notes due 2030 in a private offering to qualified institutional buyers under Rule 144A of the Securities Act.
The company plans to grant initial purchasers an option to buy up to an additional $22.5 million in notes within 13 days of the initial issuance.
The notes will be senior, unsecured obligations maturing on September 15, 2030, with interest payable semi-annually. Noteholders will have conversion rights under certain circumstances, with ADTRAN settling conversions through cash, shares of common stock, or a combination of both.
ADTRAN intends to use part of the proceeds to fund capped call transactions, which are designed to reduce potential dilution to common stock upon note conversion. The remainder will go toward repaying outstanding borrowings under its credit agreement.
The notes will be redeemable at ADTRAN’s option, in whole or in part, after September 20, 2028, if the company’s stock price exceeds 130% of the conversion price for a specified period and other conditions are met.
In connection with establishing hedges for the capped call transactions, counterparties may enter into derivative transactions or purchase ADTRAN common stock, potentially affecting the market price of the company’s shares.
ADTRAN Holdings is the parent company of Adtran, Inc., a provider of networking and communications solutions, and majority stockholder of Adtran Networks SE, formerly ADVA Optical Networking SE. The company’s stock has shown remarkable strength, delivering an 85.85% return over the past year. InvestingPro analysis reveals 8 additional key insights about ADTRAN’s financial health and growth potential, available in the comprehensive Pro Research Report.
The offering has not been registered under the Securities Act, according to the company’s press release statement. For detailed analysis of ADTRAN’s debt structure, valuation metrics, and growth prospects, investors can access the full financial health assessment through InvestingPro’s advanced analytics platform.
In other recent news, ADTRAN Inc. reported its second-quarter earnings for 2025, revealing a revenue increase to $265.1 million, which surpassed the projected $258.62 million. The company’s earnings per share (EPS) met expectations at $0, aligning with forecasts that predicted a slight loss of -$0.02. Despite the positive revenue results, the company’s stock experienced a decline, reflecting investor concerns. Additionally, the earnings report highlighted that the stock fell 13.57% to $9.20. These developments come amid ongoing market scrutiny and investor reactions to the earnings surprise. While the revenue figures were encouraging, the unchanged EPS may have contributed to the cautious sentiment observed among investors. The financial community continues to monitor ADTRAN’s performance closely in light of these recent results.
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