Adtran Holdings issues $201.25 million in 3.75% convertible notes due 2030

Published 22/09/2025, 21:14
Adtran Holdings issues $201.25 million in 3.75% convertible notes due 2030

Adtran Holdings, Inc. (NASDAQ:ADTN), a technology company with annual revenue of $983 million and a market capitalization of $771 million, announced Monday it has issued $201.25 million aggregate principal amount of 3.75% convertible senior notes due 2030. The issuance was completed on September 19, 2025, according to a statement based on a recent SEC filing. According to InvestingPro data, the company maintains strong liquidity with a current ratio of 1.96, indicating solid short-term financial health.

The notes were issued under an indenture agreement with U.S. Bank Trust Company, National Association, acting as trustee. The offering included the full exercise of an option by initial purchasers, allowing for an additional $26.25 million in principal amount of notes. For investors seeking deeper insights into Adtran’s financial health and growth prospects, InvestingPro offers comprehensive analysis through its Pro Research Report, part of its coverage of over 1,400 US equities.

The notes are senior, unsecured obligations of Adtran Holdings and will mature on September 15, 2030, unless earlier repurchased, redeemed, or converted. Interest will accrue at 3.75% per year, payable semi-annually on March 15 and September 15, beginning March 15, 2026.

Prior to June 15, 2030, holders may convert the notes only under certain conditions. After that date, holders can convert at any time until two business days before maturity. Adtran Holdings may settle conversions in cash, shares of its common stock, or a combination, at its discretion. The initial conversion rate is 86.8206 shares per $1,000 principal amount, equating to a conversion price of approximately $11.52 per share. The conversion rate is subject to customary adjustments.

The notes are redeemable at Adtran Holdings’ option, in whole or in part, on or after September 20, 2028, subject to certain conditions, including the stock price exceeding 130% of the conversion price over specified periods. If certain corporate events defined as “fundamental changes” occur, noteholders may require the company to repurchase their notes at par plus accrued interest.

In connection with the offering, Adtran Holdings entered into capped call transactions with financial institutions to limit potential dilution upon conversion. The capped call has an initial cap price of approximately $15.51 per share, representing a 75% premium over the closing price of $8.86 on September 16, 2025. The cost of these transactions was about $17.6 million.

The notes were sold in a private placement to qualified institutional buyers and are not registered under the Securities Act. Up to 22,714,447 shares of common stock may be issued upon conversion, subject to adjustment.

This information is based on a statement in a press release and a filing with the Securities and Exchange Commission.

In other recent news, ADTRAN Holdings has priced a private offering of $175 million in convertible senior notes due in 2030, with a 3.75% interest rate. This offering was increased from the initially planned $150 million, highlighting a strong demand. The notes, which are senior and unsecured, will have an initial conversion rate of 86.8206 shares of common stock per $1,000 principal amount, translating to a conversion price of approximately $11.52 per share. Additionally, B.Riley has initiated coverage on ADTRAN with a Buy rating and a $16.00 price target, citing the company’s expanded market following its acquisition of ADVA. This acquisition has increased ADTRAN’s total addressable market to $14 billion. Despite these developments, the company recently faced a decline in stock value after announcing the proposed $150 million convertible notes offering. The notes were intended for qualified institutional buyers, with an option for the initial purchaser to acquire an additional $22.5 million in notes.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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