OKTA new Cvt Note offering

Hi All,

OKTA is jumping in on the (almost) no interest debt party with a $1 billion convertible note offering due 2025. Looks like they have an existing one around $280 million due 2023, so part of the proceeds with be used to take out the existing. It has the now customary and confusing capped call transaction feature that everybody is using.
A rather large offering for OKTA’s size but I’m sure it will go to good use other than the usual “general corporate purposes”, I.E. probably an acquisition.

https://seekingalpha.com/pr/17620032-okta-inc-announces-priv…

Best,
Matt

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Some observations:

  1. “Intention to offer” and “Subject to market conditions and other factors”. So, OKTA is not blindly offering the convertible notes. Looks like a move by OKTA to take advantage of the current low-interest rates.
  2. The interest rate, conversion rate and other terms of the notes are to be determined upon pricing of the offering.
  3. Okta expects use capped call transactions to reduce potential dilution to Okta’s Class A common stock upon any conversion of notes.
  4. OKTA has done it before on Feb. 21, 2018, when the market reacted positively to the news the next trading day and in the following few months. The offering was a bit smaller at 300 million, though.
    Here is the link
    https://www.marketwatch.com/press-release/okta-inc-announces…
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