Dynatrace plans $1.25B exchangeable senior notes offering

Dynatrace, Inc. (NYSE: DT) announced that its indirect wholly-owned subsidiary, Dynatrace LLC, intends to offer $1.25 billion in aggregate principal amount of Exchangeable Senior Notes due 2031 in a private placement to qualified institutional buyers under Rule 144A of the Securities Act of 1933.

The initial purchasers will have the option to buy up to an additional $187.5 million in notes during a 13-day period beginning on the first issuance date. The notes will mature on September 1, 2031, with interest paid semi-annually. The interest rate, exchange rate, and other terms will be set at pricing.

The notes will be exchangeable for cash, Dynatrace common stock, or a combination of both, at the issuer's election. The issuer may redeem the notes on or after September 6, 2029, if the common stock price reaches at least 130% of the exchange price for at least 20 trading days within any 30 consecutive trading day period.

Dynatrace LLC plans to use a portion of the proceeds to fund exchangeable note hedge transactions, offset in part by proceeds from related warrant transactions. Up to approximately $200 million of net proceeds will be used to repurchase shares of common stock from certain note purchasers in privately negotiated transactions. The remainder will be directed toward general corporate purposes.

The company noted that hedging activity by option counterparties could influence the market price of the common stock or the notes around the time of pricing. The concurrent share repurchases may also affect the stock price and could result in a higher effective exchange price for the notes.

The notes and related securities have not been registered under the Securities Act and may not be offered or sold in the United States absent an applicable exemption from registration requirements. According to a company statement, the press release does not constitute an offer to sell or a solicitation to buy any securities.

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