By Rebecca Melvin
New York, June 27 - Evergreen Solar Inc. priced $325 million of five-year senior convertible notes Thursday to yield 4% with an initial conversion premium of 27.5%, according to a syndicate source.
Initially the deal was expected to be $300 million in size.
The registered offering, sold via bookrunner Lehman Brothers Inc., priced on the cheap end of talk, which was 3.5% to 4% for the coupon with an initial conversion premium of 27.5% to 32.5%.
The greenshoe was also upsized to $48.75 million from $45 million.
The five-year bullets will be convertible into cash up to their principal amount, with common stock for the remainder, if any, of the conversion value.
Concurrently, an affiliate sold 18.2 million of common shares at $9.50 per share in a registered public offering.
The share offering was made in connection with a stock lending agreement that Evergreen Solar entered into and a capped call transaction with an affiliate of Lehman Brothers.
The capped call transaction is expected to increase the effective conversion premium of the notes to 100% from the perspective of the company and reduce the potential dilution upon conversion of the notes.
Aside from the cost of the hedging transactions and the stock lending agreement, proceeds will be used to complete Evergreen's Devens, Mass., integrated solar panel manufacturing plant, to begin construction of a manufacturing facility that will produce heat resistant string to be used in the manufacturing of Evergreen Solar's wafers, and for general corporate purposes, including purchases of or prepayments of polysilicon and other raw materials, and for working capital.
Marlboro, Mass.-based Evergreen Solar makes solar power panels.
| Issuer: | Evergreen Solar Inc.
|
| Issue: | Convertible senior notes
|
| Bookrunner: | Lehman Brothers Inc.
|
| Amount: | $325 million, upsized from $300 million
|
| Greenshoe: | $48.75 million, upsized from $45 million
|
| Concurrent offering: | $172.9 million of common stock at $9.50 a share
|
| Maturity: | April 15, 2013
|
| Coupon: | 4%
|
| Price: | Par
|
| Yield: | 4%
|
| Conversion premium: | 27.5%
|
| Conversion ratio: | 82.5593
|
| Conversion price: | $12.11
|
| Price talk: | 3.5%-4%, up 27.5%-32.5%
|
| Calls: | Non-callable
|
| Puts: | No puts
|
| Pricing date: | June 26
|
| Settlement date: | July 2
|
| Distribution: | Registered
|
| Stock symbol: | Nasdaq: ESLR
|
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