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3D Systems (DDD) to Issue Convertible Senior Notes Worth $350M

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3D Systems (DDD - Free Report) recently announced that it proposes to offer convertible senior notes worth $350 million, maturing on Nov 15, 2026. The notes will be offered and sold in a private placement to qualified institutional investors.

Purchasers will get an option to buy an additional $52.5 million aggregate principal amount of convertible senior notes. Buyers can exercise this option within 13 days from the date on which the notes are first issued.

3D Systems stated that the offering price, interest rate and conversion rate will be determined upon the pricing of the notes. The convertible senior notes will be unsecured and the interest will be paid semi-annually.

3D Systems intends to use the net proceeds from the offering for general corporate purposes, including strategic transactions, investments and acquisitions.

Offering to Boost 3D Systems’ Financial Flexibility

Borrowing costs continue to be low, enabling companies to obtain easy financing. With the U.S. treasuries offering low rates, corporate bonds and borrowings from banks are now witnessing high demand.

We believe that the latest offering will boost 3D Systems’ financial flexibility and help meet its financial obligations. Moreover, it provides ample scope to deploy capital for long-term growth opportunities and reward higher returns to stockholders.

As of Sep 30, 2021, 3D Systems had cash and cash equivalents of $503 million and no debt obligations as well as an unused revolving credit facility worth $100 million with full availability, at present. A huge cash balance and the latest proposed senior notes offerings will provide DDD ample liquidity and financial strength to survive amid the COVID-19 crisis and continue investing in strategic growth initiatives.

Companies Enhancing Liquidity Amid Pandemic

The global leader in additive manufacturing solutions’ latest proposed senior notes offering and sizeable liquidity position amid the pandemic-led economic and business uncertainties bode well. In the wake of the pandemic, companies with improved liquidity, like 3D Systems, can sail through the ongoing volatility.

In September, DXC Technology (DXC - Free Report) issued Euro-denominated and U.S. dollar-denominated senior notes worth €1.35 billion and $1.35 billion, respectively. The offerings were made to repay its higher interest carrying older senior notes.

In June, Salesforce (CRM - Free Report) issued $8 billion of senior notes to fund the acquisition of Slack Technologies. In March, NCR Corporation raised $1.1 billion by issuing 5.125% of senior unsecured notes.

While Salesforce sports a Zacks Rank #1 (Strong Buy), DXC has a Zacks Rank 2 (Buy). NCR and 3D Systems, both carry Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank stocks here.

Year to date, shares of Salesforce, DXC, NCR and 3D Systems have rallied 34.7% 30.4%, 15.9% and 167.6%, respectively.


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