Sunnova greenshoe exercised, lifts 0.25% convertible to $575 million

By Devika Patel

Knoxville, Tenn., May 24 – Underwriters for Sunnova Energy International Inc.'s offering of 0.25% five-year convertible senior notes exercised their over-allotment option in full for $75 million more of the convertibles, increasing the size of the issue to $575 million, the company said in an 8-K filed with the Securities and Exchange Commission.

As previously reported, the company sold the convertibles at par on May 17 in a Rule 144A offering through bookrunners Goldman Sachs & Co. LLC and J.P. Morgan Securities LLC.

The convertibles have an initial conversion premium of 30% and an initial conversion price of $34.58, which equals a conversion rate of 28.9184.

The notes are non-callable until June 5, 2024 and then subject to a 130% hurdle. They are putable upon a fundamental change.

There is takeover protection.

In connection with the offering, the company entered into capped call transactions with a cap price of $60, which represents a premium of 125.6% over the last reported sales price of stock.

Net proceeds will be $560.2 million with the exercised greenshoe.

Approximately $79.7 million of net proceeds will be used to cover the cost of the call spread with remaining amounts to be used to repay outstanding debt and finance or refinance eligible green projects.

Sunnova Energy is a Houston-based solar and energy storage service provider.

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