Veeco Announces Exchange Transaction to Retire $125 Million of Its 2.70% Convertible Senior Notes Due 2023

PLAINVIEW, N.Y., Nov. 12, 2020 (GLOBE NEWSWIRE) -- Veeco Instruments Inc. (“Veeco”) (NASDAQ: VECO) today announced that it has entered into a privately negotiated exchange agreement under which it will retire $125.0 million in aggregate principal amount of Veeco’s outstanding 2.70% Convertible Senior Notes due 2023 (the “Original Notes”) in exchange for the issuance of $132.5 million in aggregate principal amount of Veeco’s new 3.50% Convertible Senior Exchange Notes due 2025 (the “New Notes”) and a cash payment to the holder in the amount of $1.1 million in respect of accrued and unpaid interest on the Original Notes to be exchanged. Following the exchange transaction, $131.7 million in aggregate principal amount of the Original Notes will remain outstanding with the terms unchanged.

The New Notes will mature on January 15, 2025 and will pay interest semiannually at a rate of 3.50% per year. The New Notes have an initial conversion rate of 41.6667 shares of Veeco’s common stock per $1,000 original principal amount of New Notes (equivalent to a conversion price of approximately $24.00 per share), subject to adjustment in certain events. The initial conversion price represents an approximately 58.6% premium over the closing sale price of Veeco’s common stock on November 11, 2020. Conversions of the New Notes will be settled in cash, shares of Veeco’s common stock or a combination thereof, at Veeco’s election.

The holder of the New Notes may convert all or a portion of its notes at its option at any time prior to the close of business on the business day immediately preceding October 15, 2024, only upon the satisfaction of certain conditions and during certain time periods. On or after October 15, 2024 until the close of business on the second scheduled trading day immediately preceding January 15, 2025, the holder may convert its New Notes at any time, without condition.

Veeco may be required to repurchase for cash the New Notes upon the occurrence of a fundamental change (as defined in the indenture governing the New Notes) at a repurchase price equal to the principal amount thereof plus accrued and unpaid interest to, but excluding, the repurchase date. In addition, upon the occurrence of certain corporate events, the conversion rate on the New Notes will increase.

The New Notes will not be redeemable by Veeco prior to January 15, 2023. On or after January 15, 2023, Veeco may redeem for cash all or any portion of the New Notes if the last reported sale price of Veeco’s common stock equals or exceeds 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 trading day of such period) ending on, and including, the trading day immediately preceding the date on which Veeco provides notice of redemption at a redemption price equal to 100% of the principal amount of the New Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date (subject to certain limited exceptions).