Exhibit 99.1
Sphere Entertainment Co. Announces Pricing of $225 Million Offering of Convertible Senior Notes
NEW YORK, December 6, 2023 – Sphere Entertainment Co. (NYSE: SPHR) (the “Company” or “Sphere Entertainment”) today announced the pricing of $225 million aggregate principal amount of 3.50% convertible senior notes due 2028 in a private offering to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”). In connection with the offering of the notes, the Company has granted the initial purchasers an option to purchase, for settlement within a 13-day period beginning on, and including, the first day on which the notes are issued, up to an additional $33.75 million aggregate principal amount of the notes. The offering of the notes and the capped call transactions described below are expected to close on December 8, 2023, subject to customary closing conditions.
The notes will be general senior unsecured obligations of Sphere Entertainment and will pay interest semi-annually on June 1 and December 1 of each year, beginning on June 1, 2024, at a rate of 3.50% per year. The notes will mature on December 1, 2028, unless redeemed, repurchased or converted earlier in accordance with their terms. The initial conversion rate for the notes will be 28.1591 shares per $1,000 principal amount of notes, which is equivalent to an initial conversion price of approximately $35.51 per share of Sphere Entertainment Class A common stock and is subject to adjustment under the terms of the notes. The initial conversion price of the notes represents a premium of approximately 25.0% to the last reported sale price of $28.41 per share of Sphere Entertainment’s Class A common stock on the New York Stock Exchange on December 5, 2023. Prior to September 1, 2028, the notes will be convertible only upon satisfaction of certain conditions and during certain periods, and, thereafter, the notes will be convertible at any time until the close of business on the second scheduled trading day immediately preceding the maturity date. Upon conversion, Sphere Entertainment will pay or deliver, as the case may be, cash, shares of Sphere Entertainment’s Class A common stock or a combination of cash and shares of Sphere Entertainment’s Class A common stock, at its election.
Sphere Entertainment estimates that the net proceeds from the offering will be approximately $217.8 million (or approximately $250.4 million if the initial purchasers exercise their option to purchase additional notes in full), after deducting the initial purchasers’ discounts and commissions and estimated expenses payable by Sphere Entertainment. Sphere Entertainment intends to use approximately $12.4 million of the net proceeds from the offering of the notes to fund the cost of entering into the capped call transactions described below in connection with the offering. Sphere Entertainment intends to use the remainder of the net proceeds for general corporate purposes, including capital for Sphere-related growth initiatives.
If the initial purchasers exercise their option to purchase additional notes, Sphere Entertainment expects to use a portion of the proceeds from the sale of the additional notes, to enter into additional capped call transactions and intends to use the remainder of the net proceeds from the sale of the additional notes for general corporate purposes, including capital for Sphere-related growth initiatives.
In connection with the pricing of the notes, Sphere Entertainment intends to enter into capped call transactions with one or more of the initial purchasers and/or their respective affiliates or other financial institutions (the “hedge counterparties”). The capped call transactions cover, subject to customary anti-dilution adjustments substantially similar to those applicable to the notes, the same number of shares of Sphere Entertainment’s Class A common stock that will initially underlie the notes.
