Business Context and Reporting Period
Company: Bread Financial Holdings, Inc.
Filing Type: Form 8-K (Current Report)
Date of Report: February 17, 2026
Event: Entry into and termination of material definitive agreements regarding Capped Call Transactions.
Key Financial Metrics
The filing does not provide standard financial performance metrics such as revenue, profit, cash flow, margins, debt levels, or liquidity ratios. The report focuses exclusively on the settlement of derivative instruments.
- Convertible Notes Status: As of December 31, 2025, no 4.25% Convertible Senior Notes due 2028 remained outstanding.
- Share Settlement Estimate: Based on the volume-weighted average price on February 17, 2026, the Company would hypothetically receive and retire approximately 1.5 million shares of Common Stock.
- Settlement Timing: Expected to occur on or before the end of February 2026.
Material Changes
The primary material change is the full termination of Capped Call Transactions previously entered into in June 2023 in connection with the issuance of the 4.25% Convertible Senior Notes. This action follows the complete retirement of the underlying Notes as of the end of 2025.
Outlook, Risks, and Management Commentary
Settlement Mechanics: The final number of shares to be delivered is dependent on the average daily volume-weighted average prices during one or more "Unwind Periods." The actual share count may differ from the 1.5 million share estimate.
Market Impact: The Company expects Option Counterparties to adjust related hedge positions, which may involve the purchase or sale of shares in the open market.
Share Repurchases: Shares received from the unwind are independent of and will not reduce any existing or future share repurchase authorizations approved by the Board.
Investor Verification Checklist
- Verify the final settlement date and the actual number of shares delivered once the Unwind Period concludes.
- Monitor open market activity for potential volatility caused by Option Counterparties adjusting hedge positions.
- Confirm that the 1.5 million share estimate aligns with the final settlement calculation based on the specific averaging dates.
- Review the full text of the Capped Call Unwind Agreement (Exhibit 10.1) for specific terms regarding postponement of averaging dates.