Under Armour Inc. announced that it hasd entered into exchange agreements with certain holders of its 1.50 percent Convertible Senior Notes due 2024. The noteholders have agreed to exchange $250 million in aggregate principal amount of Under Armour’s outstanding 2024 Notes for cash and/or 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 today.
The 2024 Notes to be exchanged represent 50 percent of the outstanding principal amount, with $250 million in the aggregate principal amount remaining outstanding following the exchange. Under Armour’s annual interest payments will be reduced by approximately $3.75 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. Such termination agreements relate to a number of options corresponding to the number of 2024 Notes subject to exchange pursuant to the aforementioned 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 today.
Photo courtesy Under Armour
