Pitney Bowes Inc. Announces Proposed Offering of $200 Million of Convertible Senior Notes
Pitney Bowes Inc. (NYSE:PBI) ("Pitney Bowes" or, the "Company") today announced that it intends to offer, subject to market and other conditions, $200 million aggregate principal amount of its convertible senior notes due 2030 (the "Convertible Notes") in a private placement under the Securities Act of 1933, as amended (the "Securities Act"). The Company also intends to grant the initial purchasers of the Convertible Notes an option to purchase, within a 13-day period from, and including, the date on which the Convertible Notes are first issued, up to an additional $30 million aggregate principal amount of the Convertible Notes.
The Company intends to use a portion of the net proceeds from the offering to pay the cost of the capped call transactions described below. If the initial purchasers of the Convertible Notes exercise their option to purchase additional Convertible Notes, the Company expects to use a portion of the net proceeds from the sale of the additional Convertible Notes to enter into additional capped call transactions with the option counterparties described below.
In addition, the Company expects to use up to $75 million of the net proceeds from the offering to repurchase shares of the Company's common stock concurrently with the pricing of the offering in privately negotiated transactions effected with or through one of the initial purchasers or its affiliate. The Company expects to use any remainder of the net proceeds from the offering for general corporate purposes and other strategic investments that align with the Company's capital strategy, which may include reinvestments in the Company's business, the repayment or refinancing of debt and other initiatives designed to reduce the Company's leverage or average borrowing cost.
The Convertible Notes will be senior unsecured obligations of the Company and will be guaranteed fully, unconditionally, and jointly and severally by each of the Company's existing and future wholly owned U.S. subsidiaries that guarantees the Company's existing credit agreement, existing senior notes or any other series of capital markets debt with an aggregate principal amount outstanding in excess of $150.0 million. The Convertible Notes will mature on August 15, 2030, unless redeemed, repurchased or converted earlier. The initial conversion rate, interest rate, and certain other terms of the Convertible Notes will be determined by negotiations between the Company and the initial purchasers. Prior to May 15, 2030, the Convertible Notes will be convertible only upon satisfaction of certain conditions and during certain periods, and, thereafter, will be convertible at any time until the close of business on the second scheduled trading day immediately preceding the maturity date. The Company will settle conversions of the Convertible Notes by paying cash up to the aggregate principal amount of the Convertible Notes to be converted and delivering shares of its common stock in respect of the remainder, if any, of its conversion obligation in excess of the aggregate principal amount of the Convertible Notes being converted.
The Company may not redeem the Convertible Notes prior to August 21, 2028. The Company may redeem for cash all or any portion of the Convertible Notes, at its option, on or after August 21, 2028, if the last reported sale price of the Company's common stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date on which the Company provides notice of redemption at a redemption price equal to 100% of the principal amount of the Convertible Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date.
In connection with the pricing of the Convertible Notes, the Company expects to enter into privately negotiated capped call transactions with one or more of the initial purchasers of the Convertible Notes or their respective affiliates and/or other financial institutions (the "option counterparties"). The capped call transactions are expected generally to reduce potential dilution to the Company's common stock upon any conversion of notes, with such reduction subject to a cap.
In connection with establishing their initial hedges of the capped call transactions, the Company expects the option counterparties or their respective affiliates to purchase shares of the Company's common stock and/or enter into various derivative transactions with respect to the Company's common stock concurrently with or shortly after the pricing of the Convertible Notes. This activity could increase (or reduce the size of any decrease in) the market price of the Company's common stock or the Convertible Notes at that time.
In addition, the option counterparties or their respective affiliates may modify their hedge positions by entering into or unwinding various derivatives with respect to the Company's common stock and/or purchasing or selling shares of the Company's common stock or other securities of the Company in secondary market transactions following the pricing of the Convertible Notes and prior to the maturity of the Convertible Notes (and are likely to do so on each exercise date for the capped call transactions or following any termination of any portion of the capped call transactions in connection with any repurchase, redemption or early conversion of the Convertible Notes). This activity could also cause or avoid an increase or a decrease in the market price of the Company's common stock or the Convertible Notes, which could affect a noteholder's ability to convert the Convertible Notes and, to the extent the activity occurs following conversion or during any observation period related to a conversion of Convertible Notes, it could affect the amount and value of the consideration that a noteholder will receive upon conversion of its Convertible Notes.
In connection with the concurrent share repurchase described above, the Company expects to repurchase shares of its common stock sold short by initial investors in the offering in privately negotiated transactions effected with or through one of the initial purchasers or its affiliate at a purchase price per share equal to the last reported sale price per share of the Company's common stock on the pricing date of the offering. These repurchases could increase (or reduce the size of any decrease in) the market price of the Company's common stock or the Convertible Notes. This activity could affect the market price of the Company's common stock prior to, concurrently with or shortly after the pricing of the Convertible Notes, and could result in a higher effective conversion price for the Convertible Notes.
The offering is being made to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A under the Securities Act. Any offers of the Convertible Notes will be made only by means of a private offering memorandum. None of the Convertible Notes, the related guarantees or any shares of the common stock issuable upon conversion of the Convertible Notes have been or are expected to be registered under the Securities Act or any state securities laws and, unless so registered, may not be offered or sold in the United States or to U.S. persons except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state securities laws. No assurance can be made that the offering of the Convertible Notes will be completed on its anticipated terms, or at all.
This press release shall not constitute an offer to sell or a solicitation of an offer to purchase the Convertible Notes or any other securities, and shall not constitute an offer, solicitation or sale in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful.
About Pitney Bowes
Pitney Bowes (NYSE:PBI) is a technology-driven products and services company that provides SaaS shipping solutions, mailing innovation, and financial services to clients around the world – including more than 90 percent of the Fortune 500. Small businesses to large enterprises, and government entities rely on Pitney Bowes to reduce the complexity of sending mail and parcels. For the latest news, corporate announcements, and financial results, visit www.pitneybowes.com/us/newsroom. For additional information, visit Pitney Bowes at www.pitneybowes.com.
Forward-Looking Statements
This press release contains statements that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements concerning the timing and completion of the offering of the Convertible Notes, the concurrent share repurchase and the capped call transactions and the anticipated use of proceeds from the offering. Words such as "estimate," "believe," "expect," "anticipate," "intend" and similar expressions may identify such forward-looking statements. Investors are cautioned that any such forward-looking statements are not guarantees of future performance or results and involve risks and uncertainties, and that actual results, developments or events may differ materially from those in the forward-looking statements as a result of various factors, including financial community perceptions of the Company and its business, operations, financial condition and the industries in which it operates and the other factors as more fully outlined in the Company's Annual Report on Form 10-K for the year ended December 31, 2024 and other reports filed with the Securities and Exchange Commission during 2025.
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