Street Calls of the Week
HUNTSVILLE, Ala. - ADTRAN Holdings, Inc. (NASDAQ:ADTN and FSE: QH9), a networking solutions provider with nearly $1 billion in annual revenue, has priced its offering of $175 million aggregate principal amount of 3.75% convertible senior notes due 2030, according to a company press release. The offering was upsized from the previously announced $150 million. According to InvestingPro data, the company’s stock has recently experienced a significant 14% decline over the past week, though analysis suggests the stock is currently undervalued.
The notes will be senior, unsecured obligations maturing on September 15, 2030, with interest payable semi-annually beginning March 15, 2026. The initial conversion rate is 86.8206 shares of common stock per $1,000 principal amount, representing a conversion price of approximately $11.52 per share—a 30% premium over the last reported sale price of $8.86 on September 16, 2025. InvestingPro analysis shows the company maintains strong liquidity with a current ratio of 1.96, indicating solid ability to meet short-term obligations.
Settlement of the offering is expected on September 19, 2025, subject to customary closing conditions. The company also granted initial purchasers an option to purchase up to an additional $26.25 million in notes.
ADTRAN expects net proceeds of approximately $168.1 million, or $193.4 million if the initial purchasers exercise their option to purchase additional notes in full. The company plans to use approximately $15.3 million to fund capped call transactions and the remaining proceeds primarily to repay outstanding borrowings under Adtran, Inc.’s Wells Fargo Credit Agreement.
In connection with the offering, ADTRAN entered into privately negotiated capped call transactions with a cap price initially set at approximately $15.51 per share, representing a 75% premium over the company’s last reported share price.
The notes and any shares issuable upon conversion have not been registered under the Securities Act and are being offered only to qualified institutional buyers pursuant to Rule 144A.
ADTRAN Holdings is the parent company of Adtran, Inc., a provider of networking and communications solutions, and the majority stockholder of Adtran Networks SE. InvestingPro subscribers can access 8 additional key insights about ADTRAN’s financial health, valuation metrics, and growth potential through the platform’s comprehensive Pro Research Report, available exclusively with a subscription.
In other recent news, ADTRAN Holdings, Inc. reported its second-quarter 2025 earnings, with revenue rising to $265.1 million, exceeding forecasts of $258.62 million. The company’s earnings per share met expectations, reporting $0 against an anticipated -$0.02. Despite the earnings results, ADTRAN announced plans to offer $150 million in convertible senior notes due 2030. These notes will be senior, unsecured obligations, with an additional option for initial purchasers to buy up to $22.5 million more in notes. The offering is set to be conducted in a private placement to qualified institutional buyers. This development comes amid a backdrop of investor concern, as reflected in the recent stock dip. The notes are structured to mature on September 15, 2030, unless repurchased, redeemed, or converted earlier.
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