By Rebecca Melvin
New York, May 13 – SunEdison Inc. has priced $750 million of convertible senior notes in two tranches, including $375 million of 2.625% eight-year convertibles and $375 million of 3.375% 10-year convertibles, both with an initial conversion premium of 40%, according to market sources.
The Rule 144A offering has an over-allotment option for up to $150 million of additional notes to be divided between the tranches.
Pricing came at the rich end and beyond the rich end of talk for both issues, which was for a 2.625% to 3.125% coupon for the 2023 notes and a 3.375% to 3.875% coupon for the 2025 notes, with a premium talked at 32.5% to 37.5% for both issues.
Active bookrunners were Deutsche Bank Securities Inc., Morgan Stanley & Co. LLC, Barclays and Goldman Sachs & Co.
The notes are non-callable with no puts and have contingent conversion. They also have net share settlement and takeover and dividend protection.
Proceeds will be used to fund mergers and acquisitions that enhance the size and value of future emerging market vehicles, to create a warehouse facility to acquire and hold operating assets for future dropdowns, to fund the net cost of capped call transactions, to optimize materials business, to retire debt and for other general corporate purposes.
In connection with the new bonds, SunEdison entered into convertible note hedge and warrant transactions, or capped calls, with initial purchasers of the bonds to establish hedge positions.
The cap price of the capped call transactions will initially be about $62.12 per share, which boosts the initial conversion premium from the issuer’s perspective to 125%.
The company has also entered into privately negotiated exchange agreements with some holders of the company’s existing 2% convertibles due 2018 and 2.75% convertibles due 2021. About $300 million of the 2018 notes and $300 million of the 2021 notes will be exchanged for the shares underlying those notes plus about $62.5 million in cash.
St. Peters, Mo.-based SunEdison is a global solar energy company.
| Issuer: | SunEdison Inc.
|
| Issue: | Convertible senior notes
|
| Amount: | $750 million
|
| Greenshoe: | $150 million
|
| Bookrunners: | Deutsche Bank Securities Inc. Morgan Stanley & Co. LLC, Barclays, Goldman Sachs & Co.
|
| Conversion premium: | 40%
|
| Conversion price: | $38.65
|
| Conversion ratio: | 25.8705
|
| Capped call: | Yes, strike on the warrants is $18.93, lifting the premium to 65% from the issuer’s perspective
|
| Calls: | Non-callable
|
| Puts: | No puts
|
| Takeover protection: | Yes
|
| Dividend protection: | Yes
|
| Contingent conversion: | Yes
|
| Net share settlement: | Yes
|
| Pricing date: | May 12
|
| Settlement date: | May 20
|
| Stock symbol: | Nasdaq: SUNE
|
| Stock reference price: | $27.61 at close May 12
|
| Distribution: | Rule 144A
|
| Market capitalization: | $7.71 billion
|
|
|
| 2023 notes
|
| Issue: | Convertible senior notes
|
| Amount: | $375 million
|
| Greenshoe: | $75 million
|
| Maturity: | June 1, 2023
|
| Coupon: | 2.625%
|
| Price: | Par
|
| Yield: | 2.625%
|
| Price talk: | 2.625% to 3.125%, up 32.5%-37.5%
|
|
|
| 2025 notes
|
| Issue: | Convertible senior notes
|
| Amount: | $375 million
|
| Greenshoe: | $75 million
|
| Maturity: | June 1, 2025
|
| Coupon: | 3.375%
|
| Price: | Par
|
| Yield: | 3.375%
|
| Price talk: | 3.375% to 3.875%, up 32.5%-37.5%
|
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