Applied Optoelectronics announces pricing of $80.2M of convertible senior notes

Applied Optoelectronics priced its private offering of $80.2 million aggregate principal amount of 5.25% Convertible Senior Notes due 2026 in an offering exempt from the registration requirements of the Securities Act of 1933, as amended. The size of the offering has increased from the previously announced offering of $80 million aggregate principal amount of Notes. The sale of the Notes to the initial purchasers is expected to settle on December 5, 2023, subject to customary closing conditions, and is expected to result in approximately $76 million in net proceeds to AOI. We intend to use the net proceeds from the offering to repurchase or exchange our existing 5.00% Convertible Senior Notes due 2024 in individual, privately negotiated transactions with existing holders thereof.Concurrently with the offering, we expect to enter into separate, privately negotiated transactions with certain holders of our 2024 notes to exchange or repurchase approximately $80.2 million principal amount of the 2024 notes for aggregate consideration consisting of approximately $81.1 million in cash, which includes accrued interest on such 2024 notes, and approximately 466,368 shares of our common stock. Following the completion of the offering, we may engage in additional exchanges, or we may repurchase or induce conversions, of the 2024 notes. Holders of the 2024 notes that participate in any of these exchanges, repurchases or induced conversions may purchase or sell shares of our common stock in the open market to unwind any hedge positions they may have with respect to the 2024 notes or to hedge their exposure in connection with these transactions. These activities may adversely affect the trading price of our common stock and the Notes we are offering. Moreover, market activities by holders of the 2024 notes that participate in the concurrent exchanges or repurchases may have impacted the initial conversion price of the Notes we are offering.