RingCentral, Inc. Prices $1.0 Billion 0% Convertible Senior Notes Offering (up 50% Conversion Premium)

RingCentral, Inc. (NYSE:RNG) today announced the pricing of $1.0 billion aggregate principal amount of 0% Convertible Senior Notes due 2025 (the “notes”) in a private placement to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Act”). The notes priced with a 50% conversion premium to the volume weighted average price per share (approximately $240.28 per share) of RingCentral’s Class A common stock (the “common stock”) on February 27, 2020.

Key elements of the transaction today include:

• $1.0 Billion 0% Convertible Senior Notes Offering (up 50% Conversion Premium)
• RingCentral redemption option, on or after March 5, 2022 (as detailed below)
• Capped Call purchased in conjunction with 0% Convertible Senior Notes due 2025 with a cap price of approximately $481
• Repurchase of approximately $172.5 million aggregate principal amount of 0% Convertible Senior Notes due 2023 issued in 2018

RingCentral also granted the initial purchasers of the notes an option to purchase, during a 13-day period from, and including, the initial issuance date of the notes, up to an additional $150 million aggregate principal amount of the notes. The sale of the notes to the initial purchasers is expected to settle on March 3, 2020, subject to customary closing conditions, and is expected to result in approximately $986.5 million in net proceeds to RingCentral after deducting the initial purchasers’ discounts and estimated offering expenses payable by RingCentral (assuming no exercise of the initial purchasers’ option).

The notes will be senior, unsecured obligations of RingCentral. The notes will not bear interest, and the principal amount of the notes will not accrete. The notes will mature on March 1, 2025, unless earlier repurchased, redeemed or converted. In addition, RingCentral may redeem the notes, at its option and subject to certain conditions, on or after March 5, 2022 as detailed below.

Capped Call purchased in conjunction with 0% Convertible Senior Notes due 2025: In conjunction with the issuance of the notes, RingCentral entered into capped call transactions with a cap price of approximately $480.56 (representing a premium of 100% over the volume weighted average price of the common stock on February 27, 2020). The capped call transactions are scheduled to expire in February 2024.