Akamai Technologies Announces Proposed Offering Of $1.1B Of Convertible Senior Notes Due 2028 And $1.1B Of Convertible Senior Notes Due 2031

The notes are to be sold only to persons reasonably believed to be "qualified institutional buyers" pursuant to Rule 144A under the Securities Act of 1933, as amended (the "Securities Act"). In addition, Akamai will grant the initial purchasers for the offering an option to purchase up to an additional $150.0 million in aggregate principal amount of the 2028 Notes and an additional $150.0 million in aggregate principal amount of the 2031 Notes, in each case, on the same terms and conditions. Upon conversion, Akamai will pay cash up to the aggregate principal amount of the notes to be converted and pay or deliver, as the case may be, cash, shares of Akamai’s common stock or a combination of cash and shares of common stock, at Akamai’s election, in respect of the remainder, if any, of its conversion obligation in excess of the aggregate principal amount of the notes being converted. Interest on the notes will be payable semi-annually in arrears on May 15 and November 15 of each year, beginning on May 15, 2027. The 2028 Notes will mature on November 15, 2028 and the 2031 Notes will mature on November 15, 2031, in each case, unless earlier redeemed, repurchased or converted in accordance with their terms prior to such date. Akamai may, subject to certain conditions, redeem for cash all, but not less than all, of either series of notes at any time, but only if the aggregate principal amount of such series of notes that remains outstanding is less than 10% of the aggregate principal amount of the notes initially issued under the relevant indenture (including any additional notes issued pursuant to the initial purchasers’ option to purchase additional notes of the relevant series), at a redemption price equal to the principal amount of the notes of such series, plus accrued and unpaid interest, if any, to, but excluding, the redemption date. The interest rate, initial conversion rate, offering price and other terms of the 2028 Notes and the 2031 Notes will be determined at the time of pricing the offering. The notes will be senior unsecured obligations of Akamai.

Subject to costs and expenses related to the convertible note hedge and warrant transactions described below, Akamai intends to use the remaining net proceeds from the offering to repay at maturity a portion of Akamai’s $1.15 billion outstanding aggregate principal amount of 0.375% Convertible Senior Notes due 2027 (the "2027 Convertible Notes"), which mature on September 1, 2027, and/or to pay cash amounts due upon any earlier conversion of the 2027 Convertible Notes, and to fund the capital expenditure requirements of its Cloud Infrastructure Services (CIS) business. In addition, Akamai intends to use any remaining net proceeds for general corporate purposes.

Akamai intends to use a portion of the net proceeds from the offering to pay the cost of the convertible note hedge transactions described below (after such cost is partially offset by the proceeds to Akamai from the sale of warrants pursuant to the warrant transactions described below). If the initial purchasers exercise their option to purchase additional notes, Akamai expects to sell additional warrants and use a portion of the net proceeds from the sale of such additional notes, together with the proceeds from the additional warrant transactions, to enter into additional convertible note hedge transactions with respect to the relevant series of notes as to which the option was exercised.