# Six months after borrowing at 0%, Akamai pays a 1% coupon on new convertible notes with its stock far lower - Published: 2026-11-10 (updated 2026-11-10) - Author: [CFO Drive](https://cfodrive.com/author/cfodrive-com.md) - Topics: [News](https://cfodrive.com/news.md) - About: [Akamai Technologies](https://www.akamai.com/) - Based on: [Akamai Announces Pricing of Offering of Convertible Senior Notes](https://www.globenewswire.com/news-release/2026/11/10/3399126/0/en/akamai-announces-pricing-of-offering-of-convertible-senior-notes.html), GlobeNewswire, 2026-11-10 - Based on: [Akamai Technologies Form 8-K, May 22, 2026](https://www.sec.gov/Archives/edgar/data/1086222/000119312526237084/0001193125-26-237084-index.htm), U.S. Securities and Exchange Commission, 2026-05-22 - Based on: [Akamai Technologies Form 8-K, November 9, 2026](https://www.sec.gov/Archives/edgar/data/1086222/000119312526452631/0001193125-26-452631-index.htm), U.S. Securities and Exchange Commission, 2026-11-09 - Source: https://cfodrive.com/news/akamai-convertible-notes-coupon-rises-after-share-drop/ - Publication: CFO Drive - Publisher: Connectively (Terkel, Inc.) - Editorial policy: https://cfodrive.com/editorial-policy/ The new Akamai convertible notes, two $1.1 billion series priced on November 9, 2026, pay a 1.00% coupon. It is the second time this year Akamai has raised money with convertibles for its cloud build-out, and this time it pays interest. ## Key points - Akamai Technologies (Nasdaq: AKAM) priced $1.1 billion of 1.00% convertible senior notes due November 15, 2028 and $1.1 billion due November 15, 2031, sold privately to qualified institutional buyers. - The conversion prices are about $112.41 for the 2028 notes and $102.37 for the 2031 notes, premiums of about 40.0% and 27.5% to the $80.29 closing price on November 9, 2026. - Akamai expects about $2,164.2 million in net proceeds and plans to spend about $250.3 million of it on convertible note hedges, partly offset by selling warrants. - The rest goes toward repaying part of its $1.15 billion of 0.375% convertible notes due September 1, 2027, funding Cloud Infrastructure Services capital spending, and general corporate purposes. - The sale is expected to close on November 12, 2026. ## What are the new Akamai convertible notes? They are two series of unsecured debt that holders can turn into Akamai stock above set prices. Both carry a 1.00% annual coupon, paid every May 15 and November 15 starting May 15, 2027. On conversion, Akamai repays the principal in cash and can settle anything above it in cash, shares or a mix. Akamai first disclosed the proposed offering earlier on November 9 in a [Form 8-K](https://www.sec.gov/Archives/edgar/data/1086222/000119312526452631/0001193125-26-452631-index.htm), then announced the final terms that evening. The banks buying the notes have an option on another $150.0 million of each series. If they take it all, Akamai says net proceeds rise to about $2,459.7 million. ## How do these terms compare with Akamai's May 2026 convertible notes? They pay interest where the May notes paid none, and they convert at lower prices and smaller premiums. According to Akamai's [Form 8-K filed May 22, 2026](https://www.sec.gov/Archives/edgar/data/1086222/000119312526237084/0001193125-26-237084-index.htm), it then sold $1.75 billion of 0.00% notes due 2030 and $1.75 billion of 0.00% notes due 2032, when its shares closed at $141.34 on May 19, 2026. That May filing also shows Akamai paid $236.6 million for hedges, spent about $350.0 million buying back stock from note buyers, and earmarked the rest for the [accelerated capital spending of its Cloud Infrastructure Services business](https://www.sec.gov/Archives/edgar/data/1086222/000119312526237084/0001193125-26-237084-index.htm). The November release names the same business as a use of the new money. Akamai's stock closed at $80.29 on November 9, 2026, about 43% below (our calculation) the $141.34 [reference price in the May 8-K](https://www.sec.gov/Archives/edgar/data/1086222/000119312526237084/0001193125-26-237084-index.htm). This time Akamai gives investors both a coupon and a smaller premium. | Term | May 2026 notes | November 2026 notes | |---|---|---| | Amount | [$1.75 billion due 2030 and $1.75 billion due 2032](https://www.sec.gov/Archives/edgar/data/1086222/000119312526237084/0001193125-26-237084-index.htm) | $1.1 billion due 2028 and $1.1 billion due 2031 | | Coupon | [0.00%](https://www.sec.gov/Archives/edgar/data/1086222/000119312526237084/0001193125-26-237084-index.htm) | 1.00% | | Conversion price | [about $201.41 and $190.81](https://www.sec.gov/Archives/edgar/data/1086222/000119312526237084/0001193125-26-237084-index.htm) | about $112.41 and $102.37 | | Conversion premium | [about 42.5% and 35.0%](https://www.sec.gov/Archives/edgar/data/1086222/000119312526237084/0001193125-26-237084-index.htm) | about 40.0% and 27.5% | | Reference share price | [$141.34 on May 19, 2026](https://www.sec.gov/Archives/edgar/data/1086222/000119312526237084/0001193125-26-237084-index.htm) | $80.29 on November 9, 2026 | | Net cost of hedges | [$236.6 million](https://www.sec.gov/Archives/edgar/data/1086222/000119312526237084/0001193125-26-237084-index.htm) | about $250.3 million | ## Why is Akamai buying hedges and selling warrants? The hedge and warrant pair, often called a call spread, raises the share price at which converting holders actually dilute existing shareholders. Akamai says the hedges should generally reduce dilution on conversion or offset cash it pays above principal, while the warrants could themselves dilute if the stock rises past their strike price. The release does not give the warrant strike price, so the effective conversion premium after the hedge is not known from the release. ## What does the Akamai convertible notes deal mean for CFOs? Our analysis: the deal shows the price of funding a capital-heavy build-out with convertibles after a share-price fall. The coupon moved from zero to 1.00%, the conversion price sits closer to the current share price, and the hedge still takes a slice of the proceeds before any cash reaches the business. For finance leaders weighing a similar raise, three questions follow from Akamai's choices: how much coupon a higher conversion premium would save, what the call spread costs against the dilution it removes, and whether refinancing a 2027 maturity early is worth new interest now. Those are [capital allocation](https://cfodrive.com/insight/the-capital-allocation-mistake-that-looks-like-success-until-the-market-goes-quiet/) decisions as much as treasury ones. Akamai, which calls itself the cloud company for an AI-driven world, is funding that bet with convertibles, and the same discipline applies to [AI infrastructure spending](https://cfodrive.com/insight/ai-governance-isnt-a-compliance-problem-its-a-capital-allocation-problem/). What the release leaves out: the warrant strike, how much of the 2027 notes it will retire, how much goes to capital spending, and any capital spending forecast. ## Frequently asked questions ### How much is Akamai raising with the convertible notes? Akamai priced two $1.1 billion series and expects about $2,164.2 million in net proceeds, or about $2,459.7 million if the banks take their full option. ### What interest rate do the Akamai convertible notes pay? Both series pay 1.00% a year, twice a year on May 15 and November 15, starting May 15, 2027. ### What is the conversion price of the Akamai convertible notes? About $112.41 a share for the 2028 notes and about $102.37 for the 2031 notes, compared with a closing price of $80.29 on November 9, 2026. ### What will Akamai do with the money? Akamai says it will pay about $250.3 million for hedges, then use the rest to repay part of its 0.375% notes due 2027, fund Cloud Infrastructure Services capital spending, and for general corporate purposes. ### How do the Akamai convertible notes compare with the May 2026 issue? The May notes paid no interest and converted at premiums of about 42.5% and 35.0%, [according to Akamai's May 8-K](https://www.sec.gov/Archives/edgar/data/1086222/000119312526237084/0001193125-26-237084-index.htm); the November notes pay 1.00% and convert at premiums of about 40.0% and 27.5%. ## Sources - [Press release from Akamai Technologies via GlobeNewswire, November 9, 2026: Akamai Announces Pricing of Offering of Convertible Senior Notes](https://www.globenewswire.com/news-release/2026/11/10/3399126/0/en/akamai-announces-pricing-of-offering-of-convertible-senior-notes.html) - [Akamai Technologies Form 8-K, May 22, 2026: completion of 0.00% convertible notes due 2030 and 2032 (SEC EDGAR)](https://www.sec.gov/Archives/edgar/data/1086222/000119312526237084/0001193125-26-237084-index.htm) - [Akamai Technologies Form 8-K, November 9, 2026: proposed offering of convertible senior notes (SEC EDGAR)](https://www.sec.gov/Archives/edgar/data/1086222/000119312526452631/0001193125-26-452631-index.htm)