SunPower to price $350 million seven-year convertibles to yield 3.5%-4%, up 32.5%-37.5%

By Rebecca Melvin

New York, Dec. 9 – SunPower Corp.’s proposed $350 million offering of seven-year convertible senior debentures is talked to yield 3.5% to 4% with an initial conversion premium of 32.5% to 37.5%, according to market sources.

The Rule 144A deal, which was launched after the market close on Tuesday, was expected to price after the market close on Wednesday via joint bookrunners Goldman Sachs & Co., Credit Agricole Securities (USA) Inc., Deutsche Bank Securities Inc. and Mizuho Securities USA Inc.

The bonds are non-callable for life with no puts, and will be stock settled only.

There is cash takeover protection via a conversion rate ratchet formula and dividend protection via a conversion rate adjustment.

As previously reported, the deal has a $52.5 million greenshoe. Total Energies Nouvelles Activites USA, a subsidiary of Total SA, which owns about 57.5% of SunPower’s common stock, has agreed to purchase $100 million of the deal conditioned on SunPower issuing at least $300 million of debentures total. If the underwriters exercise the greenshoe, Total’s commitment will not change.

The company intends to use the proceeds for general corporate purposes.

SunPower is a San Jose, Calif.-based provider of high-efficiency solar cells, solar panels and solar systems.

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