BAND · Bandwidth Inc.

Bandwidth Inc. completed the pricing of a $275 million zero-coupon convertible senior notes offering due 2032, a significant capital markets transaction aimed at refinancing existing debt and managing dilution. The notes carry no cash interest, reducing near-term interest expense, and are convertible into Class A common stock at an initial conversion price of approximately $72.64, a 37.5% premium over the June 15 closing price. The company estimates net proceeds of approximately $263.6 million, or $303.5 million if the over-allotment is fully exercised. Proceeds will be used to fund capped call transactions ($19 million) to offset potential dilution, repurchase $122.5 million of outstanding 0.50% convertible notes due 2028, buy back 189,286 shares of common stock ($10 million), repay amounts under its credit facility, and for general corporate purposes. The concurrent repurchase of existing 2028 notes effectively refinances near-term debt with longer-dated, zero-coupon obligations. The capped call transactions, with a cap price of $105.66 per share (100% premium), limit shareholder dilution if the stock price rises. Overall, the offering strengthens Bandwidth's balance sheet by extending debt maturities and reducing cash interest obligations, while the share and debt repurchases signal management's confidence in the company's valuation. The transaction is expected to close on June 18, 2026, subject to customary conditions.