Super Micro Computer, Inc. (NASDAQ: SMCI), commonly known as Supermicro, announced the pricing of a US$2.0 billion private offering of convertible senior notes due 2030. The notes carry no regular interest payments, effectively priced with a 0% coupon, though they may accrue special interest under specific conditions outlined in the indenture.
The convertible notes feature an initial conversion rate of 18.1154 shares per $1,000 principal, translating to an initial conversion price of approximately US$55.20 per share. This conversion price represents a 35% premium over Supermicro’s closing stock price of US$40.89 on 23 June.
This issuance follows a previous significant convertible notes offering by Supermicro earlier in the year. In February 2025, the company issued US$700 million in convertible senior notes due 2028, bearing a coupon of 2.25%, alongside amendments to approximately US$1.64 billion of existing notes due 2029, adjusting their coupon from 0% to 3.50% and resetting conversion terms.
On the firm’s Q3 2025 earnings call, David Weigand, CFO at Super Micro Computer, said, “CapEx was US$33 million for Q3 resulting in free cash flow of US$594 million for the quarter. During the quarter, we amended the terms of our existing 2029 convertible notes and raised US$700 million in gross proceeds in a new 2028 convertible note from the existing convertible investor group. The proceeds from the new convertible note offering will be used to strengthen our working capital, enable continued investments in R&D and expand global capacity as needed. The closing Q3 balance sheet cash position was US$2.54 billion, while bank and convertible note debt was US$2.49 billion resulting in a net cash position of US$44 million versus a negative net cash position of US$479 million last quarter.”
Supermicro intends to use approximately US$158.4 million of the net proceeds from the current issuance to fund capped call transactions, designed to mitigate potential dilution from note conversions, with a capped call price initially set at $81.78 per share. Additionally, the company will use around US$200 million of the proceeds to repurchase roughly 4.9 million shares of its common stock concurrently with the note offering, aiming further to offset potential dilution. The remaining proceeds will be directed toward general corporate purposes, including working capital and business expansion.
The notes mature on June 15, 2030, with optional redemption by Supermicro available starting June 15, 2028, subject to specific trading price conditions. Holders have the right to require the company to repurchase the notes upon certain fundamental changes at par, plus any accrued special interest.
The offering is expected to close on June 26, 2025, pending customary closing conditions and is aiming for 0% coupon, but indicative pricing range was 0% to 0.5%.
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