By Abigail W. Adams
Portland, Me., July 10 – Maxeon Solar Technologies Pte. Ltd. priced an upsized $185 million of five-year convertible notes after the market close on Thursday at par at the cheap end of talk with a coupon of 6.5% and an initial conversion premium of 15%, according to a company news release.
Price talk was for a coupon of 5.5% to 6.5% and an initial conversion premium of 15% to 25%, according to a market source.
Maxeon is a wholly owned subsidiary of SunPower Corp. with plans to be spun off into an independent company.
BofA Securities Inc., Merrill Lynch Singapore and Morgan Stanley & Co. LLC were bookrunners for the Rule 144A offering, which carries a downsized greenshoe of $15 million.
The initial size of the offering was $175 million with a greenshoe of $26.25 million.
The notes are non-callable until July 17, 2023 and then subject to a 130% hurdle.
If Maxeon’s spinoff does not occur within three months of the issuance of the notes, or if the forward purchase transactions to facilitate swap trades are not satisfied, the company will be required to repurchase the notes at 101% of their principal amount plus interest.
To facilitate swap transactions, the company will pay $40 million to purchase a number of shares at a price determined by the convertible note valuation period at maturity.
The company will also deliver $60 million shares to BofA Securities to sell during the note valuation period.
The notes will not be convertible when first issued. The conversion rate will be determined by the average VWAP over 15 consecutive trading days beginning on the fifth trading day after which Maxeon shares trade.
When they become convertible, the company will settle conversions in cash, shares or a combination of both at the company’s option.
Proceeds will be put in escrow until the spinoff is completed.
Proceeds will be used to fund the forward stock purchase transactions, to repay a promissory note to SunPower for $100 million that was issued in exchange for certain intellectual property and for general corporate purposes.
Maxeon is a San Jose, Calif.-based manufacturer of solar power technology.
| Issuer: | Maxeon Solar Technologies Pte. Ltd.
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| Securities: | Convertible senior notes
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| Amount: | $185 million
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| Greenshoe: | $15 million
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| Maturity: | July 15, 2025
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| Bookrunners: | BofA Securities Inc., Merrill Lynch Singapore and Morgan Stanley & Co. LLC
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| Coupon: | 6.5%
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| Price: | Par
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| Yield: | 6.5%
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| Conversion premium: | 15%
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| Conversion price: | TBD
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| Conversion rate: | TBD
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| Call options: | Non-callable until July 17, 2023 and then subject to a 130% hurdle
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| Put options: | At 101 plus interest if spinoff from SunCorp is not completed in three months
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| Pricing date: | July 9
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| Settlement date: | July 17
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| Distribution: | Rule 144A
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| Talk: | Coupon of 5.5% to 6.5% and initial conversion premium of 15% to 25%
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| Stock symbol: | NA
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| Stock price: | NA
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| Market capitalization: | TBD
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