Sunrun talks $475 million six-year convertible notes to yield 3.5%-4%, up 27.5%-32.5%

By Abigail W. Adams

Portland, Me., Feb. 21 – Sunrun Inc. plans to price $475 million of six-year convertible notes after the market close on Thursday with price talk for a coupon of 3.5% to 4% and an initial conversion premium of 27.5% to 32.5%, according to a market source.

Goldman Sachs & Co. LLC (lead left) and Morgan Stanley & Co. LLC are bookrunners for the Rule 144A offering, which carries a greenshoe of $75 million.

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

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

The company will repurchase a portion of its 0% convertible notes due 2026 in privately negotiated transactions.

Proceeds will be used to cover the cost of the call spread and to fund the repurchase of the 0% convertible notes due 2026.

Remaining proceeds will be used for the repayment of outstanding debt and for general corporate purposes, which may include potential acquisitions.

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

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