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PROS Holdings, Inc. (NYSE:PRO), a software company with a market capitalization of approximately $699 million, announced Wednesday the issuance of $235 million aggregate principal amount of 2.50% Convertible Senior Notes due 2030. The notes were issued on Tuesday in a private placement, according to a statement based on a recent SEC filing. InvestingPro analysis suggests the stock is currently undervalued, despite facing recent challenges with its share price declining over 35% in the past six months.
The notes bear interest at an annual rate of 2.50%, payable in cash semiannually on January 1 and July 1, beginning January 1, 2026. They are unsecured obligations of PROS Holdings and will mature in 2030. The notes are convertible into cash, shares of the company’s common stock, or a combination of both, at the company’s election.
The initial conversion rate is set at 48.8293 shares per $1,000 principal amount, which equates to a conversion price of approximately $20.48 per share. The conversion rate is subject to adjustment under certain circumstances.
Holders may convert the notes before April 1, 2030, only if specific conditions are met, including trading price thresholds or specified corporate events. After April 1, 2030, holders can convert at any time until the second scheduled trading day before maturity.
The company may not redeem the notes before July 3, 2028. After that date, redemption is permitted if the trading price of the company’s common stock into which the notes are convertible equals or exceeds 130% of the notes’ principal amount. In the event of certain fundamental changes, holders may require PROS Holdings to repurchase the notes at 100% of principal plus accrued and unpaid interest.
Net cash proceeds from the offering were approximately $48.8 million before estimated offering expenses. The company paid about $27.9 million to option counterparties for capped call transactions designed to reduce potential dilution and offset cash payments upon conversion. The capped call strike price is set at 32.5% above the closing price of PROS Holdings’ stock on June 12, 2025, with a cap at 150% above that closing price.
In connection with the notes issuance, PROS Holdings amended its existing secured credit agreement to obtain lender consent for the transaction.
This information is based on a statement from PROS Holdings included in a filing with the Securities and Exchange Commission.
In other recent news, PROS Holdings announced the refinancing of its convertible notes, exchanging $186.9 million of its 2.25% Convertible Notes due 2027 for $185 million in newly issued 2.50% Convertible Senior Notes due 2030. This move leaves approximately $80 million still to be paid on the 2027 notes when due. The company reaffirmed its second-quarter 2025 guidance, projecting total revenue of $87-$88 million and subscription revenue of $72-$72.5 million, alongside maintaining its non-GAAP earnings per share guidance of $0.04-$0.06. Needham reiterated its Buy rating on PROS Holdings with a price target of $25.00, viewing the refinancing as a fair trade-off for capital flexibility. Meanwhile, Baird downgraded the stock from Outperform to Neutral, citing concerns over the company’s ability to meet long-term targets following recent leadership changes. PROS Holdings also hosted an investor Q&A session, reaffirming its financial outlook for the second quarter of 2025. In corporate governance, the company announced the election of new directors at its annual stockholder meeting and approved amendments to its equity incentive plan. Additionally, PricewaterhouseCoopers LLP was ratified as the independent registered public accounting firm for the fiscal year ending December 31, 2025.
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