BlackBerry has completed the full repayment of all principal and interest amounts outstanding under its 1.75% extendable convertible unsecured debentures.
The offering was upsized from the previously announced offering of $160 million aggregate
principal amount of notes. The closing of the offering is expected to occur on January 29, 2024, subject to customary closing conditions, including approval from the Toronto Stock Exchange.
The notes will be BlackBerry’s general unsecured obligations, ranking senior to BlackBerry’s obligations under the Existing Debentures. The notes will bear interest at a rate of 3.00% per year, payable semiannually in arrears on February 15 and August 15 of each year, beginning on August 15, 2024, and the notes will mature on February 15, 2029, unless earlier converted, redeemed or repurchased.
The initial conversion rate of the notes is 257.5826 common shares per $1,000 principal amount of the notes, which is equivalent to an initial conversion price of approximately $3.88 per common share, representing a premium of approximately 32.50% over the closing share price of $2.93 on The New York Stock Exchange on January 24, 2024. Prior to the close of business on the business day immediately preceding November 15, 2028, the notes will be convertible only upon satisfaction of certain conditions and during certain periods, and thereafter, at any time until the close of business on the second scheduled trading day immediately preceding February 15, 2029. BlackBerry may satisfy any conversions of the notes by paying or delivering, as the case may be, cash, its common shares or a combination of cash and its common shares, at BlackBerry’s election (or, in the case of any notes called for redemption that are converted during the related redemption period, solely its common shares).
BlackBerry may not redeem the notes prior to February 22, 2027, except in the event of certain tax law changes. On or after February 22, 2027, BlackBerry may redeem for cash all or a portion of the notes, at Blackberry’s election, if the last reported sale price of Blackberry’s common shares has been at least 130% of the conversion price then in effect on each of 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 BlackBerry provides notice of redemption at a cash redemption price equal to 100% of the aggregate principal amount of the notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date.
If BlackBerry undergoes a fundamental change (as defined in the indenture governing the notes), subject to certain conditions, BlackBerry will be required to make an offer to repurchase for cash all of the outstanding notes (or any portion thereof that a holder determines to sell to BlackBerry) at a repurchase price equal to 100% of the principal amount of the notes to be repurchased, plus accrued and unpaid interest, if any, to, but excluding, the fundamental change repurchase date.
In connection with certain corporate events or if BlackBerry calls the notes for redemption, BlackBerry will, under certain circumstances, increase the conversion rate for noteholders who elect to convert their notes in connection with such corporate event or convert their notes called for redemption.
The offer and sale of the notes and the common shares issuable upon conversion of the notes, if any, have not been registered under the Securities Act or any state securities laws. Unless a subsequent sale is registered under the Securities Act, the notes and the common shares issuable upon conversion of the notes, if any, may only be offered or sold in the United States in a transaction that is exempt from, or in a transaction not subject to, the registration requirements of the Securities Act and other applicable securities laws.
