SunEdison greenshoes lift 2.625%, 3.375% convertibles to $900 million

By Marisa Wong

Madison, Wis., May 21 – Greenshoes exercised in SunEdison, Inc.’s 2.625% eight-year convertibles and 3.375% 10-year convertibles have lifted the combined amount of the deals to $900 million from $750 million, according to an 8-K filing Thursday with the Securities and Exchange Commission.

As previously reported, the company priced an initial $750 million of convertible notes, including $375 million of the 2.625% convertibles due June 1, 2023 and $375 million of the 3.375% convertibles due June 1, 2025, both with an initial conversion premium of 40%, on May 12. Both issues featured $75 million greenshoes.

Pricing for the Rule 144A offering came at the rich end and beyond the rich end of talk for both issues, which was for a 2.625% to 3.125% coupon for the 2023 notes and a 3.375% to 3.875% coupon for the 2025 notes, with a premium talked at 32.5% to 37.5% for both issues.

Active bookrunners were Deutsche Bank Securities Inc., Morgan Stanley & Co. LLC, Barclays and Goldman Sachs & Co.

The notes are non-callable with no puts and have contingent conversion. They also have net share settlement and takeover and dividend protection.

Proceeds will 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 net cost of capped call transactions, to optimize materials business, to retire debt and for other general corporate purposes.

In connection with the new bonds, SunEdison entered into convertible note hedge and warrant transactions, or capped calls, with initial purchasers of the bonds to establish hedge positions.

The cap price of the capped call transactions will initially be about $62.12 per share, which boosts the initial conversion premium from the issuer’s perspective to 125%.

The company has also entered into privately negotiated exchange agreements with some holders of the company’s existing 2% convertibles due 2018 and 2.75% convertibles due 2021. About $300 million of the 2018 notes and $300 million of the 2021 notes will be exchanged for the shares underlying those notes plus about $62.5 million in cash.

St. Peters, Mo.-based SunEdison is a global solar energy company.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.