The New Citrix Convertible: Saving Millions In The Cloud From Both Sides Now
April 25, 2014
Grazed from Forbes. Author: Bill Feingold.
Citrix Systems CTXS -0.25%, which did cloud computing before there was cloud computing, just issued a big convertible bond. The company got a great deal. If you’re surprised by that, you haven’t been paying attention. But it’s worth taking a minute to see how Citrix and companies like it are seizing on the opportunity provided by a historical imbalance between supply (low) and demand (high) for convertibles.
First of all, Citrix is a terrific company. If you do anything business-related online, you’ve probably used Citrix. Basically, Citrix’s products and services make small computers far more powerful, both by connecting them and by helping them compute more powerfully through “virtualization.” The remote-access service GoToMyPC, for instance, is under Citrix’ corporate umbrella…
Citrix generates plenty of cash—over $900 million in operating cash flow last year. Until this convertible issue, it had no debt. Didn’t need it. Citrix issued its last convertible back in 1999—that one paid an even smaller cash coupon than the new one, but that’s misleading, because the bond was priced to yield 5.25%. (Even back then, Citrix was considered one of the more stable companies in the brave new dot-com world). With today’s bond, what you see is what you get—half a percent a year in interest…
Read more from the source @ http://www.forbes.com/sites/billfeingold/2014/04/25/the-new-citrix-convertible-saving-millions-in-the-cloud-from-both-sides-now/
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