3D Systems announces issuance of $92M of convertible senior secured notes

3D Systems (DDD) entered into separate, privately negotiated subscription agreements with a limited number of qualified institutional buyers, pursuant to which 3D Systems will issue $92M aggregate principal amount of its 5.875% convertible senior secured notes due 2030. The issuance and sale of the notes are expected to close on June 23, subject to customary closing conditions. The notes will be senior secured obligations of 3D Systems, will be guaranteed by certain subsidiaries of 3D Systems and will bear interest at a rate of 5.875% per annum, payable semiannually in arrears on June 15 and December 15 of each year, beginning on December 15. The notes will mature on June 15, 2030, unless earlier redeemed, repurchased or converted in accordance with the terms of the notes. The notes will be convertible at the option of holders at any time until the close of business on the second scheduled trading day immediately preceding the maturity date. The notes will be convertible into cash, shares of 3D Systems’ common stock or a combination of cash and shares of common stock, at the election of 3D Systems. The notes will have an initial conversion rate of 445.6328 shares of common stock per $1,000 principal amount of notes. This is equivalent to an initial conversion price of approximately $2.24 per share, which represents a premium of approximately 20% over the last reported sale price of 3D Systems’ common stock on The New York Stock Exchange of $1.87 per share on June 17. The holders of the notes will have a one-time right, on June 20, 2028, to require 3D Systems to repurchase for cash all or a portion of their notes on the put date at 100% of their principal amount, plus accrued and unpaid interest. Additionally, holders of the notes will have the right to require 3D Systems to repurchase for cash all or a portion of their notes at 100% of their principal amount, plus any accrued and unpaid interest, upon the occurrence of a fundamental change. 3D Systems will also be required to increase the conversion rate for holders who convert their notes in connection with certain fundamental changes or convert their notes that are called for redemption, as the case may be, prior to the maturity date. The notes will be redeemable, in whole or in part, for cash at 3D Systems’ option at any time, and from time to time, on or after June 20, 2028 and before the 41st scheduled trading day immediately preceding the maturity date, but only if the last reported sale price per share of the common stock has been at least 130% of the conversion price then in effect for a specified period of time. 3D Systems intends to use the proceeds from the sale of the notes, together with approximately $78M of cash on hand, to purchase a portion of its outstanding 0% convertible senior notes due 2026 and approximately $15M of cash on hand to purchase shares of its outstanding common stock. 3D Systems also entered into separate, privately negotiated transactions with certain holders of the 2026 notes to repurchase approximately $180M in aggregate principal amount of the 2026 notes. The terms of each note repurchase were individually negotiated with each such holder of the 2026 notes. 3D Systems may also repurchase outstanding 2026 notes following the closing for the notes. In addition, 3D Systems entered into transactions to repurchase approximately 8M shares of its outstanding common stock from purchasers of the notes in separate, privately negotiated transactions, at a price per share equal to $1.87, which was the closing price per share of the common stock on The New York Stock Exchange on June 17.