Box (NYSE:BOX) announced the pricing of $400 million aggregate principal amount of 1.50% convertible senior notes due 2029 in a private placement. In addition, it has granted the initial purchasers of the notes an option to purchase up to an additional $60 million aggregate principal amount of the notes. The sale of the notes is expected to close on September 20, 2024. The notes will bear interest at a rate of 1.50% per year. Interest will be payable semi-annually in arrears on March 15 and September 15 of each year, beginning on March 15, 2025. The notes will mature on September 15, 2029. The initial conversion rate will be 23.0102 shares of Box’s Class A common stock per $1,000 principal amount of notes, representing a premium of approximately 30% over the last reported sale price of Box’s common stock on the NYSE on September 17, 2024. Box estimates that the net proceeds from the offering will be approximately $389.2 million, including $447.8 million if initial purchasers opt to buy additional notes in full. Box expects to use approximately $45.6 million of the net proceeds for capped call transactions, approximately $191.7 million of the net proceeds for repurchase of $140.0 million of its outstanding 0% convertible senior notes due 2026, and the remainder of the proceeds for working capital and other general corporate purposes. In connection with the notes offering, Box entered into capped call transactions with certain of the initial purchasers and/or their respective affiliates and certain other financial institutions. Box is required to make in excess of the principal amount of converted notes to a cap initially equal to $66.86, representing a premium of 100% over the last reported sale price of Box’s common stock on NYSE. Furthermore, in connection with the issuance of its 2026 Notes, Box entered into capped call transactions with certain financial institutions, that is, the existing-capped call counterparties, to unwind a portion of the existing capped call transactions corresponding to the principal amount of the 2026 Notes repurchased. Box expects to receive approximately $30.3 million in connection with the unwind transactions, which it intends to use for general corporate purposes.