Under Armour, Inc. announced that it has entered into exchange agreements with certain holders of its 1.50 percent Convertible Senior Notes due 2024. The noteholders have agreed to exchange approximately $169.1 million in aggregate principal amount of Under Armour’s outstanding 2024 Notes for cash and shares of Under Armour’s Class C common stock plus payment for accrued and unpaid interest.
The number of shares of Class C common stock to be issued by Under Armour to the Noteholders will be determined based upon a volume-weighted average price per share of Class C common stock during an averaging period commencing August 23, 2021.
The 2024 Notes to be exchanged represent approximately 68 percent of the outstanding principal amount, with approximately $80.9 million in the aggregate principal amount remaining outstanding following the exchange. Under Armour’s annual interest payments will be reduced by approximately $2.5 million.
Concurrently with entering into the exchange agreements, Under Armour entered into, with each of JPMorgan Chase Bank, National Association, Citibank, N.A. and HSBC Bank USA, National Association, termination agreements relating to a portion of the capped call transactions that were previously entered into by Under Armour in connection with the issuance of the 2024 Notes. The termination agreements relate to a number of options corresponding to the number of 2024 Notes subject to exchange pursuant to the exchange agreements. Pursuant to such termination agreements, each of JPMorgan Chase Bank, National Association, Citibank, N.A., and HSBC Bank USA, National Association will pay Under Armour a cash settlement amount in respect of the portion capped call transactions being terminated, which cash settlement amounts will be determined based upon the volume-weighted average price per share of Under Armour’s Class C common stock during an averaging period, commencing August 23, 2021.
Photo courtesy Under Armour