PAR Technology to Offer $100 Million in Convertible Senior Notes
PAR Technology Corporation (NYSE: PAR) has announced its intention to offer $100 million in Convertible Senior Notes due 2030 through a private offering aimed at qualified institutional buyers. The company may also grant initial purchasers an option to buy an additional $15 million in notes.
The notes will be unsecured obligations that pay interest semiannually. They are convertible into cash, company stock, or a mix of both. PAR plans to use the proceeds largely to repay its $90 million Blue Owl Term Loan, allocating any remaining funds for general corporate purposes and potential acquisitions.
According to the announcement, the notes will not be redeemable before January 20, 2028. After that, PAR can redeem them at 100% of the principal, plus accrued interest, if the stock price maintains 130% of the conversion price for stipulated periods. Final terms, including interest and conversion rates, will be determined based on market conditions.
Strategic Financial Move
This convertible note offering represents a strategic refinancing initiative, designed to replace PAR’s existing $90 million Blue Owl Term Loan with potentially more advantageous terms. The $100 million offering, together with the possible $15 million allocation, provides greater financial flexibility and could potentially lower interest expenses.
The convertible structure is especially noteworthy because it may offer a lower interest rate compared to standard debt, though the exact rates will depend on market conditions. The 2030 maturity provides an extended timeline. The conversion option, beginning in October 2029, in addition to early redemption rights from January 2028 (at 130% of conversion price), provide balanced options for both PAR and the noteholders. PAR’s decision to pursue the convertible bond market reflects confidence in its growth prospects and its capacity to manage debt through equity.
Key Takeaways
- Refinancing: PAR seeks to refinance its existing $90 million Blue Owl Term Loan.
- Flexibility: The offering provides enhanced financial flexibility for strategic initiatives.
- Growth: Proceeds may be used for acquisitions or technology investments.
