Enphase Energy Announces Offering of $120 million of Convertible Senior Notes Due 2024
May 29 2019 - 4:24PM
Enphase Energy, Inc. (NASDAQ:ENPH) today announced
that it intends to offer, subject to market conditions and other
factors, $120 million aggregate principal amount of convertible
senior notes due 2024 (the “Notes”) in a private placement to
qualified institutional buyers pursuant to Rule 144A under the
Securities Act of 1933, as amended (the “Securities Act”). Enphase
also expects to grant the initial purchasers of the Notes a 13-day
option to purchase up to an additional $12 million aggregate
principal amount of the Notes to cover over-allotments, if any.
The Notes are expected
to pay interest semiannually. Conversion of the Notes will be
settled in cash, shares of our common stock or a combination of
cash and shares of our common stock, at Enphase’s election. The
Notes will mature on June 1, 2024, unless earlier converted or
repurchased in accordance with their terms. The final terms of the
Notes, including the interest rate, initial conversion rate, and
other terms, will be determined by negotiations between Enphase and
the initial purchasers of the Notes.
In connection with the
offering of the Notes, we expect to enter into convertible note
hedge transactions with one or more of the initial purchasers of
the Notes and/or their respective affiliates (the “hedge
counterparties”). The convertible note hedge transactions are
expected generally to reduce potential dilution to our common stock
upon any conversion of the Notes and/or offset any cash payments we
are required to make in excess of the principal amount of converted
notes, as the case may be. We also expect to enter into warrant
transactions with the hedge counterparties. The warrant
transactions could separately have a dilutive effect to the extent
that the market value per share of our common stock exceeds the
strike price of the warrants. If the initial purchasers exercise
their option to purchase additional Notes, we expect to enter into
additional convertible note hedge transactions and additional
warrant transactions with the hedge counterparties.
We expect that in
connection with establishing their initial hedge of the convertible
note hedge transactions and warrant transactions, the hedge
counterparties may enter into various derivative transactions with
respect to our common stock concurrently with or shortly after the
pricing of the Notes. This activity could increase (or reduce the
size of any decrease in) the market price of our common stock or
the Notes at that time.
In addition, the hedge
counterparties may modify their hedge positions by entering into or
unwinding various derivatives with respect to our common stock
and/or purchasing or selling our common stock or other securities
of ours in secondary market transactions following the pricing of
the Notes and prior to the maturity of the Notes (and are likely to
do so during any observation period related to a conversion of the
Notes). This activity could also cause or avoid an increase or a
decrease in the market price of our common stock or the Notes and,
to the extent the activity occurs during any observation period
related to a conversion of the Notes, it could affect the number of
shares and value of the consideration that noteholders will receive
upon conversion of the Note.
Enphase expects to use
a portion of the net proceeds of the offering of the Notes to pay
the cost of the convertible note hedge transactions described above
(after such cost is partially offset by the proceeds to Enphase
from the sale of the warrants described above). Concurrently with
the offering, we intend to enter into separate and privately
negotiated transactions with one or more holders of our 4.00%
Convertible Senior Notes due 2023 (the “2023 Notes”) to repurchase
the 2023 Notes in exchange for a number of shares of our common
stock approximately equal to the number of shares underlying the
repurchased 2023 Notes and a cash amount to be negotiated with each
holder (each, a “2023 Notes Repurchase Transaction” and
collectively, the “2023 Notes Repurchase Transactions”). A portion
of the proceeds of this offering are expected to be used to pay any
such cash amounts. The terms of each separate 2023 Notes Repurchase
Transaction are anticipated to be individually negotiated with each
holder of 2023 Notes and will depend on factors including the
market price of our common stock and the trading price of our 2023
Notes at the time of each such 2023 Notes Repurchase Transaction.
Any repurchase of our outstanding 2023 Notes could affect the
market price of our common stock and, in the case of repurchase
effected concurrently with this offering, the initial conversion
price of the Notes. We also expect that holders of the 2023 Notes
that sell their 2023 Notes in any 2023 Notes Repurchase Transaction
may purchase or sell shares of our common stock in the market to
hedge their exposure in connection with these transactions. This
activity could affect the market price of our common stock and, in
the case of sales or exchanges effected concurrently with
this offering, this activity could also impact the initial
conversion price of the Notes.
Enphase intends to use
any remaining net proceeds from the offering of the Notes for
general corporate purposes, which may include the repayment of
indebtedness, working capital, and potential acquisitions and
strategic transactions. However, Enphase currently has no
commitments with respect to any such acquisitions or other
strategic transactions.
This press release is
neither an offer to sell nor a solicitation of an offer to buy the
Notes, the 2023 Notes or the shares of our common stock issuable
upon conversion of the Notes, nor will there be any sale of these
securities in any state or jurisdiction in which such an offer,
solicitation or sale would be unlawful prior to the registration or
qualification under the securities laws of any such state or
jurisdiction.
The Notes and the
shares of our common stock issuable upon conversion of the Notes
have not been and will not be registered under the Securities Act,
or the securities laws of any other jurisdiction, and may not be
offered or sold in the United States absent registration or an
applicable exemption from registration requirements. The offering
of the Notes is being made to qualified institutional buyers
pursuant to Rule 144A under the Securities Act.
About Enphase Energy,
Inc. Enphase, a global energy technology company, delivers
smart, easy-to-use solutions that connect solar generation, storage
and management on one intelligent platform.
Forward-Looking
StatementsThis announcement contains certain
forward-looking statements based on Enphase’s current expectations
as to the outcome and timing of future events. All statements,
other than statements of historical facts, including all statements
regarding the proposed offering of the Notes, the proposed entry
into convertible note hedge transactions and warrant transactions
with the hedge counterparties, the proposed repurchases or
exchanges of the 2023 Notes and the anticipated use of the net
proceeds from the offering of the Notes (including the amount,
terms and timing of the proposed repurchases or exchanges of the
2023 Notes and the composition of related consideration) and the
completion of the offering of the Notes (including related timing),
that address activities or results that Enphase plans, expects,
believes, projects, estimates or anticipates will, should or may
occur in the future, are forward-looking statements. Actual events
may differ materially from those expressed or implied by these
forward-looking statements, including the possibility that Enphase
will not offer the Notes or consummate the related offerings due to
market conditions; changes in the anticipated principal amount of
the Notes, which could differ based upon market conditions; changes
in the structure or terms of any convertible note hedge
transactions and warrant transactions; that Enphase will not
complete any repurchases or exchanges of the 2023 Notes; changes in
the anticipated use of the net proceeds of the offerings, which
could change as a result of market conditions or for other reasons
related to Enphase’s business and the impact of general economic,
industry or political conditions in the United States or
internationally. For a discussion of factors affecting Enphase’s
business and prospects, see our annual, quarterly and other reports
filed with the Securities and Exchange Commission. Enphase
undertakes no duty or obligation to update any forward-looking
statements contained in this release as a result of new
information, future events or changes in its expectations, except
as required by law.
Enphase Contacts:Christina Carrabino Investor
Relationsir@enphaseenergy.com+1-707-763-4784, x7354
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