Ormat Upsizes $875M Convertible Note Sale, Eyes $286M Note Buyback
Ormat priced $725 million of 1.50% Series A and $150 million of 0.00% Series B convertible notes due 2031, upsizing the deal by $125 million and granting $125 million of purchase options. Net proceeds of about $853.6 million will repurchase $285.9 million of 2027 convertible notes and $25 million of stock at $108 per share.
1. Offering Details
Ormat priced $725 million of 1.50% Series A and $150 million of 0.00% Series B convertible senior notes due 2031, upsizing the total offering to $875 million. The company granted initial purchasers options to acquire an additional $100 million of Series A Notes and $25 million of Series B Notes within 13 days of issuance.
2. Conversion Features
Both note series convert prior to maturity under specified conditions, with initial conversion rates of 7.1225 shares per $1,000 principal, reflecting a 30% premium to the March 17 equity price. Series A pays 1.50% annual interest semiannually, while Series B bears no regular interest or accreting principal.
3. Use of Proceeds
Net proceeds of approximately $853.6 million will fund repurchase of $285.9 million principal amount of 2.50% convertible notes due 2027 via cash and stock issuance, and $25 million of common shares at $108 each. If fully exercised, proceeds could reach $975.7 million to further strengthen the balance sheet.