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press release

April 21, 2020, 7:35 a.m. EDT

Inphi Corporation Announces Proposed Offering of $330 Million of Convertible Senior Notes

SANTA CLARA, Apr 21, 2020 (GLOBE NEWSWIRE via COMTEX) -- SANTA CLARA, Calif., April 21, 2020 (GLOBE NEWSWIRE) -- Inphi Corporation /zigman2/quotes/208445412/composite IPHI -4.45% today announced its intention to offer, subject to market conditions and other factors, $330 million aggregate principal amount of convertible senior notes due 2025 (the "notes") in a private offering to qualified institutional buyers pursuant to an exemption from the registration requirements of the Securities Act of 1933, as amended (the "Securities Act"). In connection with the offering, Inphi expects to grant the initial purchasers of the notes an option to purchase up to an additional $50 million aggregate principal amount of notes on the same terms and conditions.

Inphi intends to use a portion of the net proceeds from the offering of the notes to pay the cost of certain capped call transactions described below. Inphi also intends to use a portion of the net proceeds from the offering of the notes to pay the cash portion of the consideration Inphi delivers in connection with any exchange transactions for up to $100 million aggregate principal amount of its existing 1.125% Convertible Senior Notes due 2020 (the "2020 Notes") described below. Inphi intends to use the remainder of the net proceeds from the offering of the notes for general corporate purposes, including payments with respect to its outstanding 2020 Notes when due and financing potential acquisitions and other strategic transactions. However, Inphi currently has no commitments with respect to any such acquisitions or other strategic transactions.

Contemporaneously with the pricing of the offering, Inphi intends to enter into separate and privately negotiated transactions with one or more holders of the 2020 Notes to exchange up to $100 million aggregate principal amount of the 2020 Notes for a combination of cash and shares of Inphi's common stock. The terms of any exchanges of the 2020 notes will be individually negotiated with each holder and will depend on a number of factors, including the market price of Inphi's common stock and the trading price of the 2020 notes at the time of such exchanges. Inphi expects that holders of 2020 Notes that exchange their 2020 Notes may purchase or sell shares of Inphi's common stock and/or enter into or unwind various derivatives with respect to Inphi's common stock (including entering into derivatives with one or more of the initial purchasers or their respective affiliates) concurrently with or shortly after the pricing of the notes. This activity could affect the market price of Inphi's common stock and could also impact the initial conversion price of the notes.

When issued, the notes will be unsecured, senior obligations of Inphi, and interest will be payable semi-annually in arrears. Prior to the close of business on the business day immediately preceding October 15, 2024, the notes will become convertible only under certain circumstances and during certain periods. Inphi will settle conversions of the notes by paying or delivering, as the case may be, cash, shares of its common stock, or a combination of cash and shares of its common stock, at its election. Final terms of the notes, including the interest rate, the initial conversion rate, repurchase or redemption rights and other terms, will be determined at the time of pricing by negotiations between Inphi and the initial purchasers of the notes.

If the initial purchasers exercise their option to purchase additional notes, Inphi intends to use a portion of the resulting additional net proceeds from the sale of the additional notes to pay the cost of entering into additional capped call transactions and the remainder of the net proceeds from the sale of the additional notes for general corporate purposes.

In connection with the pricing of the notes, Inphi expects to enter into privately negotiated capped call transactions with one or more financial institutions, which may include one or more of the initial purchasers or their respective affiliates and/or other financial institutions (the "option counterparties"). The capped call transactions are expected generally to reduce or offset the potential dilution to Inphi's common stock upon any conversion of the notes at maturity and/or offset the potential cash payments Inphi is required to make in excess of the principal amount of converted notes, with such reduction and/or offset subject to a cap based on the cap price. If the initial purchasers exercise their option to purchase additional notes, Inphi expects to enter into additional capped call transactions with the option counterparties.

Inphi expects that, in connection with establishing their initial hedge of the capped call transactions, the option counterparties or their respective affiliates will purchase shares of Inphi's common stock and/or enter into various derivative transactions with respect to Inphi's common stock concurrently with or shortly after the pricing of the notes. This activity could increase (or reduce the size of any decrease in) the market price of Inphi's common stock or the notes at that time, and could result in a higher effective conversion price for the notes.

In addition, Inphi has been advised by the option counterparties that the option counterparties or their respective affiliates may modify their hedge positions by entering into or unwinding various derivative transactions with respect to Inphi's common stock and/or purchasing or selling Inphi's common stock in secondary market transactions following the pricing of the notes and prior to the maturity of the notes (and are likely to do so during the valuation period for the capped call transactions, which is expected to occur during the 30 trading day period beginning on the 31st scheduled trading day prior to the maturity of the notes). This activity could also cause or avoid an increase or a decrease in the market price of Inphi's common stock or the notes, which could affect the ability of noteholders to convert the notes and, to the extent the activity occurs during any observation period related to a conversion of the notes, it could affect the amount and value of the consideration that noteholders will receive upon conversion of the notes.

This press release does not constitute an offer to sell or the solicitation of an offer to buy securities and shall not constitute an offer, solicitation or sale in any jurisdiction in which such offer, solicitation or sale is unlawful. The notes and the shares of Inphi's common stock issuable upon conversion of the notes, if any, have not been registered under the Securities Act or the securities laws of any other jurisdiction and, unless so registered, may not be offered or sold in the United States except pursuant to an exemption from such registration requirements.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding the intention to offer the notes, the intended use of net proceeds from the offering, the expected terms of the offering, the extent and potential effects of the capped call transactions and the exchanges of the 2020 Notes. These forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially, including risks related to whether Inphi will offer the notes or consummate the offering of the notes on the expected terms, or at all, whether Inphi will consummate the exchanges of the 2020 Notes, the potential impact of market and other general economic conditions, whether Inphi will be able to satisfy the conditions required to close any sale of the notes, the anticipated use of the net proceeds of the offering, the fact that Inphi's management will have broad discretion in the use of the proceeds from any sale of the notes, whether the capped call transactions will become effective on the anticipated terms or at all, and other risks detailed from time to time in Inphi's filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the year ended December 31, 2019 and its Current Report on Form 8-K dated April 21, 2020. The forward-looking statements in this press release are based on information available to Inphi as of the date hereof, and Inphi does not assume any obligation to update the forward-looking statements provided to reflect events that occur or circumstances that exist after the date on which they were made except as otherwise required by law.







        Investor Contact:
        Vernon P. Essi, Jr.
        408-606-6524
        vessi@inphi.com
        
        Corporate Contact:
        Kim Markle
        408-217-7329
        kmarkle@inphi.com
        


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/zigman2/quotes/208445412/composite
US : U.S.: NYSE
$ 112.36
-5.23 -4.45%
Volume: 816,431
Aug. 11, 2020 3:51p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$5.67 billion
Rev. per Employee
$507,741
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