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Convertible Notes | 3 Months Ended
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Mar. 31, 2023
Debt Disclosure [Abstract] |
Convertible Notes | 10. Convertible Notes On February 14, 2023, the Company issued and sold $130,000 in aggregate principal amount of 5.75% Convertible Senior Notes due 2028 (the “2023 Notes”) pursuant to an indenture dated February 14, 2023, between the Company and U.S. Bank Trust Company, National Association, as trustee (or its successor in interest, the “Trustee”), in a private offering to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (“Rule 144A”). On June 14, 2021, the Company issued and sold $150,000 in aggregate principal amount of 3.25% Convertible Senior Notes due 2026 (the “2021 Notes”) pursuant to an indenture dated June 14, 2021, between the Company and the Trustee, in a private offering to qualified institutional buyers pursuant to Rule 144A. On June 16, 2020, the Company issued and sold $150,000 in aggregate principal amount of 4.25% Convertible Senior Notes due 2023 (the “June 2020 Notes”) pursuant to an indenture dated June 16, 2020, between the Company and the Trustee, in a private offering to qualified institutional buyers pursuant to Rule 144A. On August 13, 2020, the Company issued and sold $25,000 in aggregate principal amount of 4.25% Convertible Senior Notes due 2023 at a price equal to 101% of the principal amount thereof, plus interest deemed to have accrued since June 16, 2020, and constitute a further issuance of, and form a single series with, the Company’s June 2020 Notes (the “August 2020 Notes” and together with the June 2020 Notes, the “2020 Notes”). In connection with the issuance of the 2023 Notes, the Company repurchased $115,000 in aggregate principal amount of the 2020 Notes. As a result of this repurchase, the Company recognized a loss on extinguishment of approximately $9,721 during the three months ended March 31, 2023. After the issuance of the 2023 Notes (and together with the remaining 2020 Notes and the 2021 Notes, the “Convertible Notes”), the Company had $340,000 in aggregate principal amount of Convertible Notes outstanding. Key terms of the Convertible Notes are as follows:
|  | 2023 Notes |  |  | 2021 Notes |  |  | 2020 Notes |
Principal outstanding |  |  | $130.0 |  |  |  | $150.0 |  |  |  | $60.0 |
Maturity date (unless earlier converted, repurchased or redeemed) |  |  | August 15, 2028 |  |  |  | June 15, 2026 |  |  |  | June 15, 2023 |
Interest rate |  |  | 5.75% |  |  |  | 3.25% |  |  |  | 4.25% |
Conversion price |  |  | $9.54 |  |  |  | $11.04 |  |  |  | $5.92 |
Conversion rate |  |  | 104.8658 |  |  |  | 90.5797 |  |  |  | 168.9189 |
Redemption price |  |  | $12.40 |  |  |  | $14.35 |  |  |  | $7.70 |
| • |  | Interest rate: Payable semiannually in arrears on February 15 and August 15 of each year for the 2023 Notes (beginning on August 15, 2023) and June 15 and December 15 of each year for the 2020 Notes and the 2021 Notes.
| • |  | Conversion price: Convertible at an initial conversion rate into shares of the Company’s common stock, per $1,000 principal amount of notes (equivalent to an initial conversion price set forth in the table above), subject to adjustment.
| • |  | Conversion: Holders may convert at their option at any time prior to the close of business on the business day immediately preceding May 15, 2028, March 15, 2026 and March 15, 2023 for the 2023 Notes, 2021 Notes and 2020 Notes, respectively, only under the following circumstances: (i) if the last reported sale price of the Company’s common stock for at least 20 trading days during a period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price for the respective Convertible Notes on each applicable trading day; (ii) during the five business day period after any ten consecutive trading day period (the “measurement period”) in which the trading price per $1,000 principal amount of the Convertible Notes for each trading day of the measurement period was less than 98% of the product of the last reported sales price of the Company’s common stock and the conversion rate on each such trading day; (iii) upon a notice of redemption delivered by the Company in accordance with the terms of the indentures but only with respect to the Convertible Notes called (or deemed called) for redemption; or (iv) upon the occurrence of specified corporate events. On or after May 15, 2028, March 15, 2026 and March 15, 2023 in respect of the 2023 Notes, 2021 Notes and 2020 Notes, respectively, until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert their Convertible Notes at any time, regardless of the foregoing circumstances.
| • |  | Cash settlement of principal amount: Upon conversion, the Company will pay cash up to the aggregate principal amount of the Convertible Notes to be converted. At its election, the Company will also settle its conversion obligation in excess of the aggregate principal amount of the Convertible Notes being converted in either cash, shares of its common stock or a combination of cash and shares of its common stock.
| • |  | Redemption price: The Company may redeem for cash all or any portion of the Convertible Notes, at its option, on or after August 20, 2025, June 20, 2023 and June 20, 2021 in respect of the 2023 Notes, 2021 Notes and 2020 Notes, respectively, and on or prior to the 55th scheduled trading day immediately preceding the maturity date, if the last reported sale price of the Company’s common stock has been at least 130% of the conversion price for the respective
| Convertible Notes then in effect for at least 20 trading days, including the trading day immediately preceding the date on which the Company provides notice of redemption, during any 30 consecutive trading day period ending on, and including, the trading day immediately preceding the date on which the Company provides notice of redemption, at a redemption price equal to 100% of the principal amount of the notes to be redeemed, plus accrued and unpaid interest to, but excluding the redemption date. No sinking fund is provided for the Convertible Notes.
| • |  | Limited investor put rights: Holders of the Convertible Notes have the right to require the Company to repurchase for cash all or a portion of their notes at 100% of their principal amount, plus any accrued and unpaid interest, upon the occurrence of certain change of control transactions or liquidation, dissolution or common stock delisting events.
| • |  | Conversion rate increase in certain customary circumstances: In certain circumstances, conversions in connection with a “make-whole fundamental change” (as defined in the indentures) or conversions of Convertible Notes called (or deemed called) for redemption may result in an increase to the conversion rate, provided that the conversion rate will not exceed 167.7853 shares, 144.9275 shares and 270.2702 shares of the Company’s common stock per $1,000 principal amount of the 2023 Notes, 2021 Notes and 2020 Notes, respectively (the equivalent of 59,767,426 shares of the Company’s common stock), subject to adjustment.
| • |  | Seniority and Security: The Convertible Notes rank equal in right of payment, and are the Company’s senior unsecured obligations, but are subordinated in right of payment to the Company’s obligations to make certain redemption payments (if and when due) in respect of its Series A Non-Voting Convertible Preferred Stock (Note 11).
The indentures contain customary terms and covenants, including that upon certain events of default occurring and continuing, either the Trustee or the holders of not less than 25% in aggregate principal amount of the Convertible Notes outstanding may declare the entire principal amount of all the Convertible Notes to be repurchased, plus any accrued special interest, if any, to be immediately due and payable. The following table provides a summary of the carrying value of the Convertible Notes at March 31, 2023 and December 31, 2022:
|  | March 31, 2023 |  | December 31, 2022
|  | 2023 Notes |  | 2021 Notes |  | 2020 Notes |  | Total |  | 2021 Notes |  | 2020 Notes |  | Total
Principal amount |  | $ | 130,000 |  |  | $ | 150,000 |  |  | $ | 60,000 |  |  | $ | 340,000 |  |  | $ | 150,000 |  |  | $ | 175,000 |  |  | $ | 325,000 |
Plus: Premium |  |  | — |  |  |  | — |  |  |  | 250 |  |  |  | 250 |  |  |  | — |  |  |  | 250 |  |  |  | 250 |
Gross proceeds |  |  | 130,000 |  |  |  | 150,000 |  |  |  | 60,250 |  |  |  | 340,250 |  |  |  | 150,000 |  |  |  | 175,250 |  |  |  | 325,250 |
Less: Unamortized issuance costs |  |  | (3,465) |  |  |  | (2,768) |  |  |  | (366) |  |  |  | (6,599) |  |  |  | (2,981) |  |  |  | (1,053) |  |  |  | (4,034) |
Carrying amount |  |  | 126,535 |  |  | $ | 147,232 |  |  | $ | 59,884 |  |  | $ | 333,651 |  |  | $ | 147,019 |  |  | $ | 174,197 |  |  | $ | 321,216 |
Effective interest rate (1) |  |  | 6.25% |  |  |  | 3.83% |  |  |  | 5.18% |  |  |  | 5.00% |  |  |  | 3.83% |  |  |  | 5.26% |  |  |  | 4.60% |
(1) Includes amortization of the issuance costs and premium. Interest expense on the Convertible Notes during the three months ended March 31, 2023 and 2022 was $4,002 and $3,732, respectively. Interest payable of $3,243 and $621 at March 31, 2023 and December 31, 2022, respectively, is included in accounts payable and other liabilities on the Consolidated Balance Sheets. The fair value of the Convertible Notes (classified as Level 2 in the fair value hierarchy) was $331,766 and $320,513 at March 31, 2023 and December 31, 2022, respectively. The if-converted value of the Convertible Notes did not exceed the principal amount at March 31, 2023 and December 31, 2022.

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