The notes are senior, unsecured obligations and carry a 0% interest rate. Bandwidth plans to use the estimated $263.6 million in net proceeds to repurchase a portion of its outstanding 0.50% notes due in 2028, buy back approximately $10 million of its own Class A common stock, and pay for capped call transactions. The remainder of the capital is earmarked for credit facility repayments and general corporate purposes.

To mitigate potential dilution from the conversion of these notes, Bandwidth has entered into capped call agreements with financial institutions. These transactions feature an initial cap price of $105.66 per share, representing a 100% premium over the company's June 15 closing price of $52.83. The notes will carry an initial conversion price of approximately $72.64 per share. Market activity involving these hedges and concurrent stock repurchases may influence the trading price of Bandwidth's Class A common stock during the offering period.