Why BlackBerry stock is down 10% today

BlackBerry (NYSE:) shares experienced a 9.6% decline in pre-market trading on Wednesday.

The drop in stock’s price follows the announcement of a private offering of $160 million in convertible senior notes due 2029.

The Canadian security software company plans to utilize the net proceeds from the offering to facilitate the repayment or repurchase of its outstanding $150 million aggregate principal amount of 1.75% extendible convertible unsecured debentures due on February 15, 2024.

Analysts at RBC Capital Markets anticipate that the offering will address BlackBerry’s near-term financing concerns.

However, specific details regarding the terms of the $160 million convertible notes, including the coupon and conversion price, are yet to be determined.

“We believe the coupon is likely to be higher than the coupon on its existing convertible debentures (just 1.75%), which would be an incremental drag on BlackBerry’s adj. EPS vs. our estimates and consensus,” analysts said in a note.

RBC has a Sector Perform rating on BB stock.