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Broadcom to raise $3.2B via convertible preferred stock offering

Broadcom Inc. launched a convertible preferred stock offering to raise up to $3.2 billion in net proceeds.

The company plans to offer 3,250,000 shares of 8% series A mandatory convertible preferred stock for $1,000 apiece. The company will grant underwriters a 30-day option to buy up to an additional 487,500 shares to cover any overallotments. Broadcom previously planned to offer $3 billion worth of mandatory convertible preferred stock.

The offering is expected to close Sept. 30, subject to customary closing conditions. The company intends to use the net proceeds, which can rise to up to $3.7 billion if underwriters exercise their overallotment option, to repay a portion of its borrowings under existing term loan facilities on a pro rata basis.

The shares will be converted Sept. 30, 2022, unless converted earlier, into between 3.0303 and 3.5422 common shares per convertible preferred share, subject to anti-dilution adjustments and other conditions.

Bank of America Merrill Lynch, Citigroup, J.P. Morgan and Morgan Stanley are acting as representatives of the underwriters and joint-book running managers for the offering.

Barclays, BMO Capital Markets, BNP Paribas, HSBC, RBC Capital Markets and Wells Fargo Securities are also serving as book runners for the offering, and Academy Securities, BBVA, Commerzbank, Credit Suisse, Deutsche Bank Securities, Mizuho Securities, MUFG, PNC Capital Markets LLC, Scotiabank, SMBC, Standard Chartered Bank, SunTrust Robinson Humphrey and TD Securities are serving as co-managers.