SHANGHAI, China, May 27, 2025 (GLOBE NEWSWIRE) -- GDS Holdings Limited ("GDS Holdings", "GDS" or the "Company") (NASDAQ: GDS; HKEX: 9698), a leading developer and operator of high-performance data centers in China, today announced the pricing of its previously announced offering (the "Notes Offering") of 2.25% convertible senior notes in an aggregate principal amount of US$500 million due 2032 (the "Notes"). The size of the offering was increased from the previously announced $450 million aggregate principal amount of Notes. The Notes have been offered 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"). The Company has granted the initial purchasers in the Notes Offering an option to purchase up to an additional US$50 million in aggregate principal amount of the Notes, exercisable for settlement within a 13-day period, beginning on, and including, the first date on which the Notes are issued. The Company expects to close the Notes Offering on or about May 30, 2025, subject to the satisfaction of customary closing conditions.

GDS estimates that the net proceeds from the Notes Offering will be approximately $486.1 million, after deducting the initial purchasers' discount and estimated offering expenses (or approximately $534.9 million if the initial purchasers exercise in full their option to purchase additional Notes). The Company plans to use the net proceeds from the Notes Offering for working capital needs and the refinancing of its existing indebtedness, including potential future negotiated repurchases, or redemption upon exercise of the investor put right, of its convertible bonds due 2029.

When issued, the Notes will be senior unsecured obligations of GDS and bear interest at a rate of 2.25% per year, payable semiannually in arrears on June 1 and December 1 of each year, beginning on December 1, 2025. The Notes will mature on June 1, 2032, unless earlier redeemed, repurchased or converted in accordance with their terms prior to such date.

The initial conversion rate of the Notes is 30.2343 American depositary shares, each representing eight Class A ordinary shares of the Company (the "ADSs"), per US$1,000 principal amount of Notes (which is equivalent to an initial conversion price of approximately US$33.08 per ADS and represents a conversion premium of approximately 35% above the public offering price of the Primary ADSs (as defined below), which was US$24.50 per ADS (the "ADS Public Offering Price")). The conversion rate of the Notes is subject to adjustment upon the occurrence of certain events.

Prior to the close of business on the business day immediately preceding December 1, 2031, the Notes will be convertible only upon satisfaction of certain conditions and during certain periods. On or after December 1, 2031 until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert their Notes at their option at any time. Upon conversion, the Company will pay or deliver, as the case may be, cash, the ADSs or a combination of cash and ADSs, at the Company's election. Holders may also elect to receive Class A ordinary shares in lieu of any ADSs deliverable upon conversion, subject to certain procedures and conditions set forth in the terms of the Notes.

The Company may redeem for cash all but not part of the Notes (i) in the event of certain tax law changes (a "Tax Redemption") and (ii) if less than 10% of the aggregate principal of amount of notes originally issued (for the avoidance of doubt, including the notes issued upon the exercise of the initial purchasers' option to purchase additional notes) remains outstanding at such time (a "Cleanup Redemption"). The Notes will not be redeemable before June 6, 2029, except in connection with a Tax Redemption or Cleanup Redemption. On or after June 6, 2029 and on or prior to the 40th scheduled trading day immediately prior to the maturity date, the Notes will be redeemable, in whole or in part, for cash at the Company's option at any time, and from time to time, if (x) the notes are "freely tradable" (as will be defined in the indenture for the Notes), and all accrued and unpaid additional interest, if any, has been paid in full, as of the date we send such notice and (y) the last reported sale price of the ADSs has been at least 130% of the conversion price then in effect on (i) each of at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period ending on, and including, the trading day immediately prior to the date the Company provides notice of redemption and (ii) the trading day immediately preceding the date the Company sends such notice (such redemption, an "Optional Redemption"). The redemption price in the case of a Tax Redemption, Cleanup Redemption or an Optional Redemption will equal 100% of the principal amount of the Notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the related redemption date.

Holders of the Notes may require the Company to repurchase for cash all or part of their Notes on June 1, 2029. In addition, holders of the Notes have the option, subject to certain conditions, to require the Company to repurchase any Notes held in the event of a "fundamental change" (as will be defined in the indenture for the Notes). The repurchase price, in each case, will be equal to 100% of the principal amount of the Notes to be repurchased, plus accrued and unpaid interest, if any, to, but excluding, the applicable repurchase date.

The Company expects that certain purchasers of the Notes may establish a short position with respect to its ADSs by short selling its ADSs or by entering into short derivative positions with respect to its ADSs (including entering into derivatives with an affiliate of an initial purchaser in the Notes Offering), in each case, in connection with the Notes Offering. Any of the above market activities by purchasers of the Notes could increase (or reduce any decrease in) or decrease (or reduce any increase in) the market price of the Company's ADSs or the Notes at that time, and the Company cannot predict the magnitude of such market activity or the overall effect it will have on the price of the Notes or its ADSs.

The Company also announced today by separate press release that the Company has priced a separate registered public offering (the "Delta Placement of Borrowed ADSs") of 6,000,000 ADSs, at the ADS Public Offering Price, that the Company will lend to an affiliate (the "ADS Borrower") of an initial purchaser in the Notes Offering in order to facilitate the privately negotiated derivative transactions by some holders of the Notes for purposes of hedging their investment in the Notes. The Company has entered into an ADS lending agreement (the "ADS Lending Agreement") with the ADS Borrower, pursuant to which the Company will lend 6,000,000 ADSs (the "Borrowed ADSs") to the ADS Borrower. The ADS Borrower or its affiliate will receive all of the proceeds from the sale of the Borrowed ADSs and the Company will not receive any of those proceeds, but the ADS Borrower will pay the Company a nominal lending fee for the use of those ADSs pursuant to the ADS Lending Agreement. The activity described above could affect the market price of the Company's ADSs or the Notes otherwise prevailing at that time.

The Company also announced today by separate press release the pricing of a separate registered public offering (the "Primary ADSs Offering") of 5,200,000 ADSs (the "Primary ADSs"), at the ADS Public Offering Price. The underwriters have been granted a 30-day option to purchase up to 780,000 additional Primary ADSs.

Nothing contained herein shall constitute an offer to sell or the solicitation of an offer to buy any securities, including the Notes, the Borrowed ADSs or the Primary ADSs, nor shall there be any offer or sale of the securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful. The Delta Placement of Borrowed ADSs and the Primary ADSs Offering are being made only by means of separate prospectus supplements and accompanying prospectuses pursuant to an effective registration statement filed with the U.S. Securities and Exchange Commission (the "SEC"). The closing of each of the Notes Offering, the Delta Placement of Borrowed ADSs and the Primary ADSs Offering is conditioned upon the closing of each of the other offerings and vice versa. If any of the three offerings are not consummated, the ADS loan transaction under the ADS Lending Agreement will terminate and all of the Borrowed ADSs must be returned to GDS.

The Notes, the ADSs deliverable upon conversion of the Notes, if any, and the Class A ordinary shares represented thereby or deliverable upon conversion of Notes in lieu thereof, have not been and will not be registered under the Securities Act or any state securities laws, and are being offered and sold only to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A under the Securities Act.

About GDS Holdings Limited

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May 27, 2025 22:00 ET (02:00 GMT)