Cloudflare, Inc. Announces Pricing of Offering of $2.175 Billion of 0% Convertible Senior Notes Due 2031
Cloudflare, Inc. (“Cloudflare”) (NYSE: NET) today announced the pricing of $2.175 billion aggregate principal amount of 0% convertible senior notes due 2031 (the “notes”) in a private offering (the “offering”) to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A promulgated under the Securities Act of 1933, as amended (the “Securities Act”). Cloudflare also granted the initial purchasers of the notes an option to purchase, for settlement within a 13-day period beginning on, and including, the first day on which the notes are issued, up to an additional $325.0 million aggregate principal amount of the notes. The sale of the notes to the initial purchasers is expected to settle on August 13, 2026, subject to customary closing conditions, and is expected to result in approximately $2.14 billion in net proceeds to Cloudflare after deducting the initial purchasers’ discount and estimated offering expenses payable by Cloudflare (assuming no exercise of the initial purchasers’ option to purchase additional notes).
The notes will be senior, unsecured obligations of Cloudflare. The notes will not bear regular interest and the principal amount of the notes will not accrete. The notes will mature on August 15, 2031, unless earlier redeemed, repurchased, or converted in accordance with their terms. Except in the case of a cleanup redemption (as defined below), Cloudflare may not redeem the notes prior to August 20, 2029. Cloudflare may redeem for cash all or any portion of the notes (subject to certain limitations), at its option, on or after August 20, 2029, if the last reported sale price of Cloudflare’s Class A 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 preceding the date on which Cloudflare provides notice of redemption. In addition, subject to certain conditions, Cloudflare may redeem for cash all, but not less than all, of the notes at any time if the amount of the notes that remains outstanding at such time is less than $200.0 million (a “cleanup redemption”). The redemption price for any optional redemption or cleanup redemption will be equal to 100% of the principal amount of the notes to be redeemed, plus any accrued and unpaid special interest to, but excluding, the redemption date. No sinking fund is provided for the notes, which means that Cloudflare is not required to redeem or retire the notes periodically.
