Lumentum Announces $1.1 Billion Convertible Notes Offering to Fund Corporate Purposes

Lumentum Holdings has announced a $1.1 billion convertible notes offering, with the option to purchase an additional $165 million. The notes will be senior, unsecured obligations with a semi-annual interest rate, and can be converted into cash, common stock, or a combination of both. Lumentum plans to use a portion of the proceeds to pay for capped call transactions and repurchase a portion of its 0.50% Convertible Senior Notes due 2026.

Lumentum Holdings Inc. (NASDAQ: LITE), a leading designer and manufacturer of optical and photonic products, has announced its intention to offer $1.1 billion in aggregate principal amount of convertible senior notes due in 2032. The notes will be sold in a private placement to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended [1].

The notes are senior, unsecured obligations with semi-annual interest payable in arrears. They are convertible into cash, common stock, or a combination of both, subject to certain conditions and periods. The interest rate, conversion rate, and other terms will be determined upon pricing of the offering [1].

Lumentum expects to use a portion of the net proceeds from the offering to pay for capped call transactions and repurchase a portion of its 0.50% Convertible Senior Notes due 2026. The remaining net proceeds will be used for general corporate purposes, which may include repayment or repurchase of indebtedness, capital expenditures, working capital, and potential acquisitions [1].

The notes will be offered to qualified institutional buyers, and neither the notes nor the shares of common stock issuable upon conversion will be registered under the Act or the securities laws of any other jurisdiction [1].

Lumentum's announcement follows recent market expectations that the company will outperform long-term projections due to its industry-leading Electro-absorption Modulated Laser (EML) technology and new AI products in emerging markets. The company is favored over competitor Coherent due to higher growth prospects, faster margin expansion, and a more diversified AI optics portfolio [2].

References:
[1] https://www.businesswire.com/news/home/20250902686705/en/Lumentum-Announces-%241.1-Billion-Convertible-Notes-Offering
[2] https://www.ainvest.com/news/lumentum-holdings-positioned-growth-ai-optics-eml-technology-diversified-portfolio-2508-5/