Information security firm Palo Alto Networks announced Monday that it plans to raise $ 1.5 billion in convertible bonds by 2023. The interest on debt and conversion rates has yet to be disclosed.
The company is owned by Nir Tzuk, one of Check Point’s founders, the private placement is intended only for institutional buyers. Palo Alto Networks also expects to grant the initial purchasers of the notes a 30-day option to purchase up to an additional $225 million aggregate principal amount of the notes.
The debentures will not be secured and the interest will be paid each year. The conversion of the debentures will be for shares or cash. In effect, the cyber company will double its cash reserves, which stand at $ 1.55 billion in the fourth quarter. Palo Alto is trading at a market value of $ 19.3 billion, after rising 59% in 12 months.
Palo Alto joins another Israeli company, Wix. The site construction company raised $ 385 million in convertible bonds last month, in a private placement to institutional investors. Its debt bears almost zero interest and is also due to be repaid by July 2023, in semi-annual installments.