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SunEdison plans $750 million of convertible notes in two tranches
By Rebecca Melvin
New York, May 11 – SunEdison Inc. launched an offering of $750 million of convertible senior notes in two tranches, including $375 million of eight-year notes and $375 million of 10-year notes. Pricing is expected to occur after the market close on Tuesday, according to market sources.
The Rule 144A deal has a greenshoe for up to $150 million of additional notes to be divided equally between the tranches.
Price talk on the 2023 notes is for a 2.625% to 3.125% coupon and 32.5% to 37.5% initial conversion premium.
Price talk on the 2025 notes is for 3.375% to 3.875% coupon and a 32.5% to 37.5% premium.
Both tranches are non-callable with no puts.
Active bookrunners are Deutsche Bank Securities Inc., Morgan Stanley & Co. LLC, Barclays and Goldman Sachs & Co.
Settlement is for cash or a cash and stock combination.
There is dividend protection via a conversion rate adjustment and takeover protection.
Proceeds are expected to be used to fund mergers and acquisitions that enhance the size and value of future emerging market vehicles, to create a warehouse facility to acquire and hold operating assets for future dropdowns, to fund the cost of the capped call transactions, to optimize materials business, to retire debt and for other general corporate purpose.
In connection with the deal, the company plans to enter into capped call transactions with initial purchasers of the bonds. The capped call will be used to establish initial hedge positions.
St. Peters, Mo.-based SunEdison makes solar technology and develops, finances, installs and operates distributed solar power plants.
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