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Investing.com -- Check Point Software Technologies Ltd (NASDAQ:CHKP) stock fell 3.9% in after-hours trading Tuesday following the cybersecurity firm’s announcement of a $1.5 billion convertible senior notes offering.
The company plans to offer the 0.00% Convertible Senior Notes due 2030 in a private placement to qualified institutional buyers. Check Point also expects to grant initial purchasers an option to buy up to an additional $225 million in notes.
The notes will not bear regular interest and will mature on December 15, 2030, unless earlier repurchased, redeemed or converted. They will be convertible at the option of holders only upon satisfaction of certain conditions before September 16, 2030, and at any time thereafter until two days before maturity.
Check Point intends to use the proceeds to fund capped call transactions designed to reduce potential dilution from the notes, and to repurchase up to $225 million of its ordinary shares under its existing share repurchase program. Remaining funds will be allocated for general corporate purposes, potentially including mergers and acquisitions.
The company may redeem the notes for cash under certain tax-related circumstances, or after December 20, 2028, if specific conditions are met. Holders may require Check Point to repurchase the notes on December 15, 2028, if the company’s share price falls below a specified threshold.
The notes and potential underlying shares have not been registered under the Securities Act and may only be offered to qualified institutional buyers under Rule 144A exemptions.
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