By Rebecca Melvin
New York, March 26 - SunPower Corp. priced an upsized $220 million of five-year convertible debentures after the close of markets Thursday at par to yield 4.5% with an initial conversion premium of 25%, according to a syndicate source.
The Rule 144A deal, originally talked at $200 million in size, priced at the midpoint of talk, which was for a yield of 4.25% to 4.75% and a premium of 22.5% to 27.5%.
Deutsche Bank Securities Inc., Credit Suisse, Bank of America Merrill Lynch and Citigroup Global Markets Inc. were the joint bookrunners.
There is a greenshoe of $30 million.
The non-callable debentures cannot be put, and they have contingent conversion after Dec. 31, 2010 at a price hurdle of 130%. After Dec. 15, 2014, the bonds are freely convertible.
The debentures will be convertible only into cash and not into shares of SunPower's common stock.
In connection with the sale, SunPower entered into convertible debenture hedge and warrant transactions intended to reduce potential exposure to cash payments upon conversion.
Proceeds are intended to replenish cash reserves to be used for the company's acquisition of SunRay Renewable Energy. Proceeds will also be used for working capital, for capital expenditures, for general corporate purposes, to pay the cost of the cash convertible debenture hedge and warrant transactions, and potentially, for debt repayment.
SunPower is a San Jose, Calif.-based provider of high-efficiency solar cells, solar panels and solar systems.
| Issuer: | SunPower Corp.
|
| Issue: | Convertible debentures
|
| Amount: | $220 million, upsized from $200 million
|
| Greenshoe: | $30 million
|
| Maturity: | March 15, 2015
|
| Bookrunners: | Deutsche Bank Securities Inc., Credit Suisse, Bank of America Merrill Lynch, Citigroup Global Markets Inc.
|
| Coupon: | 4.5%
|
| Price: | Par, $1,000
|
| Yield: | 4.5%
|
| Conversion premium: | 25%
|
| Conversion price: | $22.53
|
| Conversion ratio: | 44.3853
|
| Call protection: | Non-callable for life
|
| Puts: | No puts
|
| Contingent conversion: | Yes, after Dec. 31, 2010 at 130%, and freely convertible after Dec. 15, 2014
|
| Price talk: | 4.25%-4.75%, up 22.5%-27.5%
|
| Pricing date: | March 25
|
| Settlement date: | April 1
|
| Distribution: | Rule 144A
|
| Stock reference price: | $18.02
|
| Stock listing: | Nasdaq: SPWRA
|
| Market capitalization: | $1.8 billion
|
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