PagerDuty Announces Pricing of $350 Million Convertible Senior Notes Offering

PagerDuty, Inc. (NYSE: PD) (“PagerDuty”) today announced the pricing of $350 million principal amount of 1.50% Convertible Senior Notes due 2028 (the “notes”) in a private placement (the “offering”) to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”). PagerDuty also granted the initial purchasers of the notes an option to purchase up to an additional $52.5 million principal amount of notes. The sale of the notes is expected to close on October 13, 2023, subject to customary closing conditions.

The notes will be senior unsecured obligations of PagerDuty and will accrue interest payable semiannually in arrears on April 15 and October 15 of each year, beginning on April 15, 2024, at a rate of 1.50% per year. The notes will mature on October 15, 2028 unless earlier converted, redeemed or repurchased. The initial conversion rate of the notes will be 36.5647 shares of PagerDuty’s common stock per $1,000 principal amount of such notes (equivalent to an initial conversion price of approximately $27.35 per share). The initial conversion price of the notes represents a premium of approximately 27.5% over the last reported sale price of PagerDuty’s common stock on the New York Stock Exchange on October 10, 2023. Upon conversion, PagerDuty 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 PagerDuty’s common stock or a combination of cash and shares of PagerDuty’s common stock, at PagerDuty’s election, in respect of the remainder, if any, of PagerDuty’s conversion obligation in excess of the aggregate principal amount of the notes being converted.

PagerDuty may not redeem the notes prior to October 20, 2026. PagerDuty may redeem for cash all or any portion of the notes (subject to certain limitations), at its option, on or after October 20, 2026 and prior to the 61st scheduled trading day immediately preceding the maturity date, if the last reported sale price of PagerDuty’s common stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date on which PagerDuty provides notice of redemption at a redemption price equal to 100% of the principal amount of the notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date.