MP Materials greenshoe lifts five-year convertibles to $690 million

By Taylor Fox

New York, March 26 – Underwriters for MP Materials Corp.’s 0.25% five-year convertible notes fully exercised their $90 million greenshoe, lifting the total deal size to $690 million, according to an 8-K filed with the Securities and Exchange Commission.

The company previously priced an upsized $600 million of five-year green convertible notes at par with an initial conversion premium of 26.5%.

As previously reported, pricing came at the cheap end of talk for a coupon of 0% to 0.25% and toward the cheap end of talk for an initial conversion premium of 25% to 30%, according to a market source.

BofA Securities Inc. (lead left), Morgan Stanley & Co. LLC and Deutsche Bank Securities Inc. were active bookrunners for the Rule 144A offering.

The initial size of the offering was $500 million with a greenshoe of $75 million.

The notes are non-callable until April 5, 2024 and then subject to a 130% hurdle.

They are putable upon a fundamental change.

The notes will be settled in cash, shares or a combination of both at the company’s option.

Net proceeds from the convertible notes offering are expected to be $672.2 million and will be used for future investment in or refinancing of eligible green projects.

MP Materials is a Mountain Pass, Calif.-based producer of rare earth materials.

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