BUZZ - Cloud service provider Akamai shares rise after issuing $2.2 billion in convertible bonds

November 10 - ** The share price of cloud service provider Akamai Technologies (AKAM.O) rose 2.1% to $81.98 in early trading on Tuesday, after the company successfully completed a round of financing

** On Monday evening, AKAM announced (link) the pricing of $1.1 billion of convertible bonds due November 15, 2028, with a coupon rate of 1%, and another $1.1 billion of convertible bonds due November 15, 2031, also with a coupon rate of 1%

** The conversion price for the 2028 bonds is set at $112.41, representing a 40% premium to the previous trading day's closing price; the conversion price for the 2031 bonds is $102.37, a 27.5% premium

** On Monday, AKAM shares fell 3.4% after the company (link) announced that proceeds from the issuance would be used at maturity to repay a portion of the $1.15 billion outstanding 0.375% convertible bonds due 2027, as well as to fund capital expenditures for its cloud infrastructure services business

** The company also plans to use about $250.3 million of the net proceeds to pay for the cost of convertible note hedge transactions, to help mitigate potential dilution effects

** Due to recent market performance, the stock is down about 6% year to date. In comparison, the S&P 500 Technology Index .SPLRCT has gained about 13% so far this year, while the Nasdaq Index .IXIC has risen 8%

** According to the latest data from London Stock Exchange Group (LSEG), the average rating from 24 analysts is "Buy"; the median target price is $122.50

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