Sunrun talks $350 million five-year convertibles to yield 0%-0.5%, up 42.5%-47.5%

By Abigail W. Adams

Portland, Me., Jan. 25 – Sunrun Inc. plans to price $350 million of five-year convertible notes after the market close on Monday with price talk for a coupon of 0% to 0.5% and an initial conversion premium of 42.5% to 47.5%, according to a market source.

Credit Suisse Securities (USA) LLC, Morgan Stanley & Co. LLC, BofA Securities Inc. and RBC Capital Markets Corp. are bookrunners for the Rule 144A offering, which carries a greenshoe of $50 million.

The notes are non-callable for three years and then subject to a 130% hurdle.

They will be settled in cash, shares or a combination of both at the company’s option.

There is takeover and dividend protection.

In connection with the offering, the company will enter into capped call transactions.

Proceeds will be used to cover the cost of the call spread, to repay debt and for general corporate purposes, which may include potential acquisitions or strategic transactions.

Sunrun is a San Francisco-based residential solar panel company.

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