Tenable Holdings has priced an upsized $725 million offering of 0.25% convertible senior notes due 2031, with proceeds earmarked for a major share repurchase, repayment of term loans and additional strategic flexibility.
The cybersecurity exposure management company increased the offering from $650 million and granted purchasers an option for up to another $75 million, potentially increasing the transaction to $800 million.
Tenable expects approximately $705.6 million of net proceeds from the base offering and as much as $778.8 million if the additional-note option is fully exercised.
The company plans to spend approximately $170.5 million to repurchase roughly 5.3 million shares concurrently with the financing.
Tenable will also use approximately $58.1 million for capped-call transactions designed to reduce potential dilution or offset cash payments associated with future note conversions.
Additional proceeds will repay the term loans under Tenable’s senior secured credit facility. Remaining capital can be used for general corporate purposes, including further share repurchases, acquisitions, strategic investments, working capital and capital expenditures.
The notes carry a 0.25% annual interest rate and mature September 15, 2031.
Their initial conversion rate is 22.3005 Tenable shares per $1,000 principal amount, equivalent to an initial conversion price of approximately $44.84 per share.
That conversion price represents an approximately 40% premium to Tenable’s September 10 closing price of $32.03.
Tenable can generally begin redeeming the notes after September 20, 2029, subject to specified stock-price conditions. The financing gives the company a relatively low-coupon source of long-term capital while simultaneously reducing secured debt and returning capital to shareholders.
