Boston, MA 09/25/2014 (wallstreetpr) – Solar energy systems provider, SolarCity Corp (NASDAQ:SCTY) disclosed that it was planning to issue Convertible Senior Notes due 2019 through an issue to the eligible institutional investors in the U.S. As is the normal case adopted by all the companies, it would use the proceeds for general purposes.
Notes Offering
SolarCity Corp (NASDAQ:SCTY) said that the issue size would be $500 million of aggregate principal amount of the Convertible Senior Notes due in 2019, its statement revealed. It also indicated its intention to grant an additional amount of $75 million aggregate principal notes to the initial purchasers of the issue.
SolarCity said that the notes would be converted into shares on or before the second scheduled trading day immediately before the Notes maturity date. However, the company has not disclosed other details and said that the initial conversion price, interest rate and other terms of the Notes would be finalized after negotiations with the initial purchasers of the notes.
The notes term would allow holders to surrender to the company the Notes to buyback if any fundamental change happens at a buyback price equal to the principal amount plus unpaid, as well as, accrued interest. The company may also be required to boost the conversion rate of the Notes in case of drastic fundamental changes happen to the Notes terms.
Cap On Call Transactions
SolarCity Corp (NASDAQ:SCTY) expressed its intention to strike an agreement with the initial purchasers or their affiliates in connection with the capping of call transactions. In case the initial purchasers exercise their option of over-allotment, it intends to strike an additional deal to cap all transactions. The company said that unless it preferred to settle the capped call transactions in cash, it would lead to compensate the possible dilution of its common stock after the notes are converted into shares.
Net Proceeds Usage
SolarCity Corp (NASDAQ:SCTY) disclosed that it would use the net proceeds from the issue for general corporate purposes such as capital expenditures, working capital and possible acquisitions apart from meeting the capped call transaction charges.
