By Rebecca Melvin
New York, Dec. 13 - SunEdison Inc. priced an upsized $1 billion of convertible senior notes in two tranches, including $500 million of 2% five-year convertibles and $500 million of 2.75% seven-year convertibles, both with an initial conversion premium of 27.5%, according to a syndicate source.
The Rule 144A offering was upsized from a previously announced $800 million in two tranches. There is an upsized over-allotment option for each tranche for up to an additional $100 million of notes for each tranche.
Pricing came at the midpoint of talk for both issues, which was for a 1.75% to 2.25% coupon for the 2018 notes and a 2.5% to 3% coupon for the 2021 notes, both with a premium talked at 25% to 30%.
Deutsche Bank Securities Inc., Goldman Sachs & Co., Wells Fargo Securities LLC and BofA Merrill Lynch were joint bookrunners.
The notes are non-callable with no puts and have contingent conversion if shares exceed 120% of the conversion price. They also have net share settlement and takeover protection.
Proceeds, together with proceeds from warrant transactions and cash on hand, will be used to repay all $550 million outstanding of SunEdison's 7.75% senior notes due 2019, to repay a $200 million second-lien term loan and to fund the cost of convertible note hedge transactions.
In connection with the new bonds, SunEdison entered into convertible note hedge and warrant transactions with initial purchasers of the bonds, which boosts the premium from the issuer's perspective. The strike price of the warrant transactions related to the 2018 notes will initially be $18.35 per share, which is a premium of about 60%. The strike price of the warrant transactions related to the 2021 notes will initially be $18.93 per share, which is a premium of about 65%.
St. Peters, Mo.-based SunEdison develops, makes and sells silicon wafers.
| Issuer: | SunEdison Inc.
|
| Issue: | Convertible senior notes
|
| Amount: | $1 billion, upsized from $800 million
|
| Greenshoe: | $200 million, upsized from $160 million
|
| Bookrunners: | Deutsche Bank Securities Inc. Goldman Sachs & Co., Wells Fargo Securities LLC, BofA Merrill Lynch
|
| Conversion premium: | 27.5%
|
| Conversion price: | $14.62
|
| Conversion ratio: | 68.3796 shares
|
| Call spread: | Yes
|
| Calls: | Non-callable
|
| Puts: | No puts
|
| Takeover protection: | Yes
|
| Contingent conversion: | Yes, at 120%
|
| Net share settlement: | Yes
|
| Pricing date: | Dec. 12
|
| Settlement date: | Dec. 20
|
| Stock symbol: | Nasdaq: SUNE
|
| Stock reference price: | $11.47 at close Dec. 12
|
| Distribution: | Rule 144A
|
| Market capitalization: | $3.02 billion
|
|
|
| 2018 notes
|
| Issue: | Convertible senior notes
|
| Amount: | $500 million, upsized from $400 million
|
| Greenshoe: | $100 million, upsized from $80 million
|
| Maturity: | Oct. 1, 2018
|
| Coupon: | 2%
|
| Price: | Par
|
| Yield: | 2%
|
| Price talk: | 1.75%-2.25%, up 25%-30%
|
| Call spread: | Yes. Strike on the warrant is $18.35 per share, lifting the premium to 60% from the issuer's perspective
|
|
|
| 2021 notes
|
| Issue: | Convertible senior notes
|
| Amount: | $500 million, upsized from $400 million
|
| Greenshoe: | $100 million, upsized from $80 million
|
| Maturity: | Jan. 1, 2021
|
| Coupon: | 2.75%
|
| Price: | Par
|
| Yield: | 2.75%
|
| Call spread: | Yes, Strike on the warrants is $18.93, lifting the premium to 65% from the issuer's perspective
|
| Price talk: | 2.5%-3%, up 25%-30%
|
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