Sunnova Energy International Inc. (“Sunnova”) (NYSE: NOVA) today
announced the pricing of $500 million aggregate principal amount of
0.25% convertible senior notes due 2026 (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”). Sunnova also granted the initial purchasers of the notes the
option to purchase up to an additional $75 million aggregate
principal amount of the notes within a 13-day period beginning on,
and including, the date on which the notes are first issued. The
sale of the notes is expected to close on May 20, 2021, subject to
customary closing conditions.
The notes will be senior, unsecured obligations of Sunnova and
will bear cash interest from May 20, 2021 at an annual rate of
0.25% payable on June 1 and December 1 of each year, beginning on
December 1, 2021. The notes will mature on December 1, 2026, unless
earlier converted, repurchased or redeemed. The initial conversion
rate will be 28.9184 shares of Sunnova’s common stock, par value
$0.0001, per $1,000 principal amount of notes (equivalent to an
initial conversion price of approximately $34.58 per share of
Sunnova’s common stock). The notes will be convertible into cash,
shares of Sunnova’s common stock or a combination of cash and
shares of Sunnova’s common stock, at Sunnova’s election.
Sunnova will not be able to redeem the notes prior to June 5,
2024. On or after June 5, 2024, Sunnova may redeem the notes at its
option if the last reported sale price of Sunnova’s common stock
has been at least 130% of the conversion price then in effect for
at least 20 trading days (whether or not consecutive) during any 30
consecutive trading-day period (including the last trading day of
such period) ending on and including the trading day immediately
preceding the date on which Sunnova provides notice of redemption,
at a redemption price equal to 100% of the principal amount of the
notes to be redeemed, plus accrued and unpaid interest, if any, to,
but excluding, the redemption date.
If a “fundamental change” (as defined in the indenture governing
the notes) occurs at any time prior to the maturity date, holders
of the notes may require Sunnova to repurchase for cash all or any
portion of their notes at a repurchase price equal to 100% of the
principal amount of the notes to be repurchased, plus accrued and
unpaid interest, if any, to, but excluding, the repurchase date. In
addition, following certain corporate events or if Sunnova issues a
notice of redemption, Sunnova will, under certain circumstances,
increase the conversion rate for holders who convert their notes in
connection with such corporate event or notice of redemption.
Sunnova estimates that the net proceeds from the offering will
be approximately $487.1 million (or $560.2 million if the initial
purchasers exercise their option to purchase additional notes in
full), after deducting the initial purchasers’ discounts and
estimated offering expenses payable by Sunnova. Sunnova intends to
allocate a portion of the net proceeds from the offering to repay
outstanding debt, for other general corporate purposes, and to
finance or refinance, in whole or in part, recently completed,
pending or future Eligible Green Projects. “Eligible Green
Projects” include expenditures for renewable energy and energy
efficiency. Pending the allocation of any amounts to any Eligible
Green Project, we will temporarily hold the allocated proceeds for
Eligible Green Projects, at our own discretion, in cash or cash
equivalents or other short-term marketable instruments, or repay
existing indebtedness, consistent with our investment policy and
capital allocation framework. In addition, Sunnova intends to use
$79.7 million of the net proceeds to pay the cost of the capped
call transactions described below.
In connection with the pricing of the notes, Sunnova entered
into capped call transactions (the “capped call transactions”) with
certain of the initial purchasers or their respective affiliates
(the “option counterparties”). The capped call transactions are
expected generally to reduce the potential dilution to Sunnova’s
common stock upon any conversion of notes and/or offset any cash
payments Sunnova is required to make in excess of the principal
amount of converted notes, as the case may be, with such reduction
and/or offset subject to a cap initially equal to $60.00 (which
represents a premium of 125.6% over the last reported sale price of
Sunnova’s common stock on the New York Stock Exchange on May 17,
2021), subject to certain adjustments under the terms of the capped
call transactions. If the initial purchasers exercise their option
to purchase additional notes, Sunnova expects to enter into
additional capped call transactions with the option
counterparties.
In connection with establishing their initial hedge of the
capped call transactions, Sunnova expects the option counterparties
or their respective affiliates to purchase shares of Sunnova’s
common stock and/or enter into various derivative transactions with
respect to Sunnova’s 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 Sunnova’s
common stock or the notes at that time.
In addition, the option counterparties or their respective
affiliates may modify their hedge positions by entering into or
unwinding various derivatives with respect to Sunnova’s common
stock and/or purchasing or selling Sunnova’s common stock or other
securities of Sunnova in secondary market transactions following
the pricing of the notes and prior to the maturity of the notes
(and are likely to do so on each exercise date for the capped call
transactions, which are expected to occur on each trading day
during the observation 30 day trading period beginning on the 31st
scheduled trading day prior to the maturity date of the notes, or
following any termination of any portion of the capped call
transactions in connection with any repurchase, redemption or early
conversion of the notes). This activity could also cause or avoid
an increase or a decrease in the market price of Sunnova’s common
stock or the notes, which could affect the ability of noteholders
to convert the notes and, to the extent the activity occurs during
any observation period related to a conversion of notes, it could
affect the amount and value of the consideration that a noteholder
will receive upon conversion of its notes.
Neither the notes, nor any shares of Sunnova’s common stock
issuable upon conversion of the notes, have been, nor will be,
registered under the Securities Act or any state securities laws
and, unless so registered, such securities may not be offered or
sold in the United States absent registration or an applicable
exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act and other
applicable securities laws.
This press release is neither an offer to sell nor a
solicitation of an offer to buy any securities, nor shall it
constitute an offer, solicitation or sale of the securities in any
jurisdiction in which such offer, solicitation or sale would be
unlawful prior to the registration or qualification under the
securities laws of any such jurisdiction.
FORWARD LOOKING STATEMENTS
This press release contains forward-looking statements within
the meaning of Section 27A of the Securities Act and Section 21E of
the Securities Exchange Act of 1934, as amended. Forward-looking
statements generally relate to future events or Sunnova’s future
financial or operating performance. In some cases, you can identify
forward-looking statements because they contain words such as
“may,” “will,” “should,” “expect,” “plan,” “anticipate,” “going
to,” “could,” “intend,” “target,” “project,” “contemplates,”
“believe,” “estimate,” “predict,” “potential” or “continue” or the
negative of these words or other similar terms or expressions that
concern Sunnova’s expectations, strategy, priorities, plans or
intentions. Forward-looking statements in this press release
include, but are not limited to, statements regarding the
expectations in connection with the offering, the use of proceeds
from the offering and actions of the option counterparties and the
effects on the price of our common stock as a result thereof.
Sunnova’s expectations and beliefs regarding these matters may not
materialize, and actual results in future periods are subject to
risks and uncertainties that could cause actual results to differ
materially from those projected, including risks regarding our
ability to forecast our business due to our limited operating
history, the effects of the coronavirus pandemic on our business
and operations, results of operations and financial position, our
competition, fluctuations in the solar and home-building markets,
availability of capital, our ability to attract and retain dealers
and customers and our dealer and strategic partner relationships.
The forward-looking statements contained in this press release are
also subject to other risks and uncertainties, including those more
fully described in Sunnova’s filings with the SEC, including our
Annual Report on Form 10-K for the year ended December 31, 2020 and
our Quarterly Report on Form 10-Q for the quarter ended March 31,
2021. The forward-looking statements in this press release are
based on information available to Sunnova as of the date hereof,
and Sunnova disclaims any obligation to update any forward-looking
statements, except as required by law.
ABOUT SUNNOVA
Sunnova Energy International Inc. (NYSE: NOVA) is a leading
residential solar and energy storage service provider with
customers across the U.S. and its territories. Sunnova’s goal is to
be the source of clean, affordable and reliable energy with a
simple mission: to power energy independence so that homeowners
have the freedom to live life uninterrupted®.
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version on businesswire.com: https://www.businesswire.com/news/home/20210517006025/en/
Investor Relations: Rodney McMahan, Vice President
Investor Relations IR@sunnova.com 281.971.3323
MEDIA CONTACT Alina Eprimian, Media Relations Manager
Alina.eprimian@sunnova.com
Sunnova Energy (NYSE:NOVA)
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