Imax Corp (NYSE:IMAX) has priced a $220 million offering of 0.75% convertible senior notes due in 2030. This private offering is aimed at qualified institutional buyers under Rule 144A of the Securities Act, with an expected settlement date of November 6, 2025, pending customary closing conditions. Initial purchasers have an option to acquire an additional $30 million.
The notes will pay interest semi-annually starting May 15, 2026, and mature on November 15, 2030. The conversion rate at the outset is set at approximately 23.5743 common shares per $1,000 principal amount, which equates to a conversion price of around $42.42 per share. This represents a 30% premium over the last reported common share price of $32.63.
In an effort to mitigate potential share dilution from note conversion, IMAX intends to buy capped calls. The company expects to net around $212 million from this offering, or $241.1 million should the additional notes option be exercised, with proceeds aimed at refinancing existing notes and covering capped call costs. IMAX has also initiated repurchases of its existing convertible notes totaling approximately $229.7 million.
Market activity related to these transactions may impact the trading of IMAX shares, as existing option counterparties may engage in purchasing shares to hedge their exposure. The cap price on the capped call transactions is set at $57.1025 per share, 75% above the recent common share price.
#Investor Takeaway
This offering indicates IMAX's strategy to refinance existing debt and manage equity dilution risk.
#Market Impact
Investors should monitor how this capital raise influences share prices, particularly with potential buying activity around common shares by hedged holders. The new notes may also affect IMAX's overall debt profile.
#What’s Next
Investors should track the settlement of the notes on November 6, 2025, as well as any updates on the status of the capped call transactions.