BlackBerry Announces Redemption of Existing Convertible Debentures and Issuance of New Convertible Debentures

WATERLOO, ONTARIO--(Marketwired - Aug. 26, 2016) - BlackBerry Limited (NASDAQ:BBRY)(TSX:BB), a global leader in secure mobile communications, today announced the amendment of the indenture governing its 6% unsecured convertible debentures (BB.DB.U) (the "6% Debentures") to permit optional redemption prior to November 13, 2016. Additionally, there will be an issuance of a notice of redemption to holders of the 6% Debentures pursuant to which BlackBerry will redeem the entire outstanding principal amount of the 6% Debentures on September 2, 2016 (the "Redemption Date"). As of the date hereof, approximately USD$1.245 billion aggregate principal amount of 6% Debentures remains outstanding.

The 6% Debentures will be redeemed on the Redemption Date at a redemption price of 106.7213% of the outstanding principal amount of the Debentures. The redemption price includes all of BlackBerry's obligations in respect of principal and interest, and no additional amounts will be payable under the 6% Debentures. BlackBerry may revoke the redemption notice at any time prior to the close of business on the business day prior to the Redemption Date. The normal course issuer bid for the 6% Debentures announced by BlackBerry on August 4, 2016 will terminate upon the completion of the redemption.

Holders of 6% Debentures remain entitled to convert their 6% Debentures into common shares of BlackBerry ("Common Shares") at a conversion price of USD$10.00 per Common Share at any time on or prior to September 1, 2016, pursuant to the terms of the 6% Debentures. Based on the conversion price, BlackBerry expects that none of the 6% Debentures will be converted.

BlackBerry also announced that it has entered into an agreement pursuant to which Fairfax Financial Holdings Limited ("Fairfax") and other institutional investors will subscribe for 3.75% unsecured convertible debentures of BlackBerry (the "3.75% Debentures") on a private placement basis for an aggregate subscription price of USD$605 million. The transaction is expected to be completed on September 2, 2016. The 3.75% Debentures will be convertible into common shares of BlackBerry at a price of USD$10.00 per Common Share and will be due on November 13, 2020. Based on the number of Common Shares currently outstanding, if all of the USD$605 million of 3.75% Debentures were converted, the Common Shares issued upon conversion would represent approximately 11.57% of the Common Shares outstanding after giving effect to the conversion. The other terms of the 3.75% Debentures are substantially identical to those of the 6% Debentures, except that the 3.75% Debentures are not redeemable prior to maturity.