Sunnova greenshoe lifts 2.625% convertibles due 2028 to $600 million

By Marisa Wong

Los Angeles, Aug. 19 – The initial purchasers of Sunnova Energy International Inc.’s recently priced 2.625% convertible notes due 2028 exercised their $100 million over-allotment option in full on Friday, according to an 8-K filing with the Securities and Exchange Commission.

This brings the total size of the offering to $600 million.

Sunnova priced an upsized $500 million of the six-year convertible notes on Aug. 16 at par to yield 2.625% with an initial conversion premium of 30%, as previously reported.

Pricing came at the cheap end of coupon talk of 2.375% to 2.625%, but within initial talk of 2.375% to 2.875%. The premium came at the rich end of revised price talk for an initial conversion premium of 27.5% to 30%. Initial talk was 25% to 30%.

The deal size was originally announced as $425 million with a $75 million greenshoe.

J.P. Morgan Securities LLC is the bookrunner for the Rule 144A offering.

The notes are not callable before Aug. 20, 2025. After that date, the notes may be redeemed at the issuer’s option subject to a 130% hurdle.

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 entered into capped call transactions. The initial cap is $46.10, a 75% premium over the last reported sale price of the company’s stock.

With the greenshoe exercise, the company entered into additional capped call transactions, according to Friday’s 8-K filing.

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

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