By Abigail W. Adams
Portland, Me., March 30 – Stem Inc. priced an upsized $200 million of seven-year green convertible notes after the market close on Wednesday at par at the cheap end of talk with a coupon of 4.25% and an initial conversion premium of 27.5%, according to a company news release and a market source.
Price talk was for a coupon of 3.75% to 4.25% and an initial conversion premium of 27.5% to 32.5%.
Morgan Stanley & Co. LLC (lead left) and Evercore were bookrunners for the Rule 144A offering, which carries a greenshoe of $40 million.
The initial size of the offering was $175 million with a greenshoe of $35 million.
The notes are non-callable until April 5, 2027 and then subject to a 130% hurdle.
In connection with the offering, the company entered into capped call transactions with a cap price of $11.18, which represents a premium of 100% over the last reported sales price of stock.
Approximately $23.2 million of net proceeds will be used to cover the cost of the call spread, $99.8 million will be used to repurchase $163 million in principal of the company’s 0.5% green convertible notes due 2028 in privately negotiated transactions with the remaining amount to be used for general corporate purposes.
Stem is a San Francisco-based smart energy storage solutions company.
| Issuer: | Stem Inc.
|
| Amount: | $200 million
|
| Greenshoe: | $40 million
|
| Issue: | Green convertible senior notes
|
| Maturity: | April 1, 2030
|
| Bookrunners: | Morgan Stanley & Co. LLC and Evercore
|
| Coupon: | 4.25%
|
| Price: | Par
|
| Yield: | 4.25%
|
| Conversion premium: | 27.5%
|
| Conversion price: | $7.13
|
| Conversion rate: | 140.3066
|
| Call options: | Non-callable until April 5, 2027 and then subject to a 130% hurdle
|
| Put options: | None
|
| Pricing date: | March 29
|
| Settlement date: | April 3
|
| Distribution: | Rule 144A
|
| Talk: | Coupon of 3.75% to 4.25% and initial conversion premium of 27.5% to 32.5%
|
| Stock symbol: | NYSE: STEM
|
| Stock price: | $5.59 at market close March 29
|
| Market capitalization: | $864 million
|
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