MP Materials greenshoe exercised, ups convertibles to $747.5 million

By Mary-Katherine Stinson

Lexington, Ky., March 8 – MP Materials Corp. underwriters exercised their option to purchase an additional $97.5 million of the company’s 3% convertible notes due 2030, pushing the total deal size to $747.5 million, according to an 8-K filing with the Securities and Exchange Commission.

The company priced the Rule 144A convertibles after the market close on Monday at par with an initial conversion premium of 40% via bookrunner BofA Securities Inc.

The company realized net proceeds of approximately $731.1 million, before deductions for the cost of capped call transactions.

Approximately $65.3 million will be used to cover the cost of the call spread, $400 million will be used to fund the repurchase of the 0.25% convertible notes due 2026 of which about $358.4 million will come from the net proceeds and $191.6 million will be used to repurchase 12.3 million shares.

Remaining proceeds will be used for general corporate purposes.

MP Materials is a Las Vegas-based specialty materials company.

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