By Abigail W. Adams
Portland, Me., Nov. 18 – Stem, Inc. priced an upsized $400 million of seven-year green convertible notes after the market close on Wednesday at par at the rich end of talk with a coupon of 0.5% and an initial conversion premium of 32.5%, according to a company news release.
Price talk was for a coupon of 0.5% to 1% and an initial conversion premium of 27.5% to 32.5%, according to a market source.
Morgan Stanley & Co. LLC (lead left), Goldman Sachs & Co. LLC and Barclays were bookrunners for the Rule 144A offering, which carries an upsized greenshoe of $60 million.
The initial size of the deal was $350 million with a greenshoe of $52.5 million.
The notes are non-callable until Dec. 5, 2025 and then subject to a 130% hurdle.
There is takeover protection.
The notes will be settled in cash, shares or a combination of both at the company’s option.
In connection with the offering, the company entered into capped call transactions with a cap price of $49.66, which represents a premium of 125% over the last reported sales price of stock.
Net proceeds will be used to cover the cost of the call spread, finance or refinance existing or new eligible green expenditures, including investments, and optimize reducing waste through operations.
Stem is a San Francisco-based advanced energy storage solutions company.
| Issuer: | Stem, Inc.
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| Securities: | Green convertible senior notes
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| Amount: | $400 million
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| Greenshoe: | $60 million
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| Maturity: | Dec. 1, 2028
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| Bookrunners: | Morgan Stanley & Co. LLC (lead left), Goldman Sachs & Co. LLC and Barclays
|
| Coupon: | 0.5%
|
| Price: | Par
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| Yield: | 0.5%
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| Conversion premium: | 32.5%
|
| Conversion price: | $29.24
|
| Conversion rate: | 34.1965
|
| Call options: | Non-callable until Dec. 5, 2025 and then subject to a 130% hurdle
|
| Put options: | Upon a fundamental change
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| Pricing date: | Nov. 17
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| Settlement date: | Nov. 22
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| Distribution: | Rule 144A
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| Talk: | Coupon of 0.5% to 1% and initial conversion premium of 27.5% to 32.5%
|
| Stock symbol: | NYSE: STEM
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| Stock price: | $22.07 at market close Nov. 17
|
| Market capitalization: | $3.19 billion
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