Harmonic (HLIT) shares fell to a three-year low Wednesday after the provider of video delivery infrastructure said it has priced the sale of $125 million 4% senior notes due 2020 and said it will use about $70 million of the net proceeds to pay debt related to a recent acquisition and $50 million for stock buybacks.
Shares were down 5.2% at $4.26, and earlier hit $4.25 – the lowest since June 2012.
The initial purchaser of the notes has a 30-day option to purchase up to an additional $18.75 million aggregate principal amount of the notes, to cover over-allotments.
The conversion rate for the notes is 173.9978 shares of common stock per $1,000 principal amount of notes, which is equivalent to an initial conversion price of approximately $5.75 per share.
Harmonic says repurchases of common stock effected concurrently with the offering may have affected share price around the time of the pricing of the notes, and may have resulted in a higher effective conversion price.