Advanced Energy Raises $1.15B in 0% Convertible Notes with 50% Conversion Premium
Advanced Energy closed a $1.15 billion 0% convertible note offering due 2031 with full exercise of a $150 million option, raising $1.128 billion net proceeds. It used $442.4 million and 1.98 million shares to retire 2028 notes and allocated $69 million to capped call costs, setting a 50% initial conversion premium at a $508.78 share price.
1. Offering Details
Advanced Energy issued $1.15 billion aggregate principal amount of 0% convertible senior notes due May 15, 2031, including full exercise of a $150 million initial purchasers’ option. The company received approximately $1,128.1 million in net proceeds after discounts and offering expenses.
2. Use of Proceeds and Note Exchange
The company deployed $69.0 million to fund capped call transactions and used $442.4 million plus issuance of 1.98 million common shares to exchange $438.3 million of its 2.50% convertible senior notes due 2028. Remaining proceeds will support general corporate purposes, including potential retirement of outstanding 2028 notes.
3. Conversion Features and Redemption Rights
The initial conversion rate is 1.9655 shares per $1,000 principal (approximately $508.78 per share), a 50% premium over recent stock price. Capped call cap price is $678.38 (100% premium). Notes are redeemable for cash from May 21, 2029 if the stock trades above 130% of the conversion price for 20 trading days, with additional repurchase rights on fundamental change.