SolarEdge Technologies (NASDAQ:SEDG) has priced its private offering of $300M convertible senior notes due 2029.
The notes will bear interest at 2.25% per year, payable semiannually, beginning on January 1, 2025. They will mature on July 1, 2029, unless earlier repurchased, redeemed or converted.
Initial purchasers will have a 13-day option to buy up to an additional $45M of the notes on the same terms and conditions. The sale of the notes to the initial purchasers is expected to settle on June 28, 2024.
The notes will be convertible into cash, shares of common stock of SolarEdge or a combination thereof, based on an initial conversion rate of 29.1375 shares of SolarEdge’s (SEDG) common stock per $1,000 principal amount of notes.
Net proceeds from the offering will be approximately $293.2M, or approximately $337.2M if the initial purchasers exercise their option to purchase additional notes in full.
The company plans to use around $25.2M of the proceeds to pay the cost of the capped call transactions it intends to enter. These transactions are expected generally to reduce the potential dilution to SolarEdge’s (SEDG) common stock upon any conversion of the notes and/or offset any cash payments the company is required to make in excess of the principal amount of converted notes.
Proceeds will also be used to repurchase a portion of its outstanding 0.000% Convertible Notes due 2025 and for general corporate purposes.
Shares of SolarEdge Technologies (SEDG) were down around 1% premarket on Wednesday after falling to a seven-year low in the previous session.