Exhibit 99.1
Okta, Inc. Announces Private Offering of $1.0 Billion of Convertible Senior Notes
June 8, 2020
SAN FRANCISCO—(BUSINESS WIRE)—June 8, 2020—Okta, Inc. (“Okta”) (NASDAQ: OKTA) today announced its intention to offer, subject to market conditions and other factors, $1.0 billion in aggregate principal amount of Convertible Senior Notes due 2026 (the “notes”) in a private offering (the “offering”) to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”). Okta also expects to grant the initial purchasers of the notes the option to purchase, within a13-day period from, and including, the initial issuance date of the notes, up to an additional $150.0 million aggregate principal amount of the notes.
The notes will be senior, unsecured obligations of Okta, and interest will be payable semi-annually in arrears. The notes will be convertible into cash, shares of Okta’s Class A common stock or a combination thereof, at Okta’s election. The interest rate, conversion rate and other terms of the notes are to be determined upon pricing of the offering.
In connection with the pricing of the notes, Okta expects to enter into privately negotiated capped call transactions with one or more of the initial purchasers and/or their respective affiliates and/or other financial institutions (the “option counterparties”). The capped call transactions will cover, subject to anti-dilution adjustments, the number of shares of Class A common stock underlying the notes sold in the offering. The capped call transactions are generally expected to reduce potential dilution to Okta’s Class A common stock upon any conversion of notes and/or offset any cash payments Okta is required to make in excess of the principal amount of converted notes, as the case may be, with such reduction and/or offset subject to a cap.
Okta has been advised that, in connection with establishing their initial hedges of the capped call transactions, the option counterparties or their respective affiliates expect to purchase shares of Okta’s Class A common stock and/or enter into various derivative transactions with respect to the Class A common stock concurrently with or shortly after the pricing of the notes. This activity could increase (or reduce the size of any decrease in) the market price of the Class A common stock or the notes at that time. In addition, the option counterparties or their respective affiliates may modify their hedge positions by entering into or unwinding various derivatives with respect to the Class A common stock and/or purchasing or selling the Class A common stock or other securities of Okta in secondary market transactions following the pricing of the notes and prior to the maturity of the notes (and are likely to do so following any conversion, repurchase or redemption of the notes, to the extent Okta exercises the relevant election under the capped call transactions). This activity could also cause or avoid an increase or a decrease in the market price of the Class A common stock or the notes, which could affect the ability of noteholders to convert the notes and, to the extent the activity occurs following a conversion or during any observation period related to a conversion of notes, it could affect the number of shares and value of the consideration that noteholders will receive upon conversion of the notes.
Okta intends to use a portion of the net proceeds from the offering to pay the cost of the capped call transactions. If the initial purchasers exercise their option to purchase additional notes, Okta expects to use a portion of the net proceeds from the sale of such additional notes to enter into additional capped call transactions with the option counterparties. Okta intends to use the remainder of the net proceeds from the offering for general corporate purposes.
