Sunrun greenshoe lifts 0% convertible notes due 2026 to $400 million

By Taylor Fox

New York, Jan. 28 – The underwriters of Sunrun Inc.’s recent offering of 0% convertible senior notes due 2026 exercised their $50 million over-allotment option in full, bringing the total issue size to $400 million, according to an 8-K filing with the Securities and Exchange Commission.

Sunrun priced $350 million of the five-year convertible notes after the market close on Jan. 25 at par with a coupon of 0% and an initial conversion premium of 50%, as previously reported.

Pricing came at the rich end of initial price talk for a coupon of 0% to 0.5% and richer than initial talk for an initial conversion premium of 42.5% to 47.5%.

Credit Suisse Securities (USA) LLC, Morgan Stanley & Co. LLC, BofA Securities Inc. and RBC Capital Markets Corp. were bookrunners for the Rule 144A offering.

The notes are non-callable until Feb. 6, 2024 and then subject to a 130% hurdle.

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

They are putable upon a fundamental change. There is dividend protection.

In connection with the offering, the company entered into capped call transactions with a cap price of $157.22, which represents a premium of 100% over the last reported sales price of stock.

Proceeds will be used to cover the cost of the call spread, to repay debt and for general corporate purposes, which may include potential acquisitions or strategic transactions.

Sunrun is a San Francisco-based residential solar panel company.

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