Stem talks $350 million seven-year convertible notes to yield 0.5%-1%, up 27.5%-32.5%

By Abigail W. Adams

Portland, Me., Nov. 17 – Stem, Inc. plans to price $350 million of seven-year green convertible notes after the market close on Wednesday with price talk 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 are bookrunners for the Rule 144A offering, which carries 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 will enter into capped call transactions.

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.

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