Enphase Energy, Inc. (Nasdaq: ENPH) today
announced that it intends to offer, subject to market conditions
and other factors, $500 million aggregate principal amount of green
Convertible Senior Notes due 2026 (the “2026 notes”) and $500
million aggregate principal amount of green Convertible Senior
Notes due 2028 (the “2028 notes” and together with the 2026 notes,
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”). We also expect to grant the initial
purchasers of the notes a 13-day option to purchase up to an
additional $50 million aggregate principal amount of 2026 notes and
an additional $50 million aggregate principal amount of 2028 notes
to cover over-allotments, if any.
The Notes:
The notes will be senior, unsecured obligations
of Enphase. We will settle conversions of the notes in cash, shares
of our common stock or a combination of cash and our common stock,
at our election. The notes are expected to pay interest
semiannually. The 2026 notes will mature on March 1, 2026, unless
earlier converted, redeemed or repurchased in accordance with their
terms; and the 2028 notes will mature on March 1, 2028, unless
earlier converted, redeemed or repurchased in accordance with their
terms. The notes will also be redeemable at our option after a
specified date and subject to the satisfaction of certain
conditions. The conversion rate and other terms of the notes are to
be determined upon pricing of the offering.
Convertible Note Hedge and Warrant
Transactions:
In connection with the pricing of the notes, we
expect to enter into convertible note hedge transactions relating
to each series of notes with one or more of the initial purchasers
or other financial institutions (the “counterparties”). The
convertible note hedge transactions are expected generally to
reduce or offset the potential dilution to our common stock upon
any conversion of the relevant notes and/or offset any cash
payments we are required to make in excess of the principal amount
of the notes, as the case may be. We also expect to enter into
warrant transactions relating to each series of notes with the
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 over-allotment option, we expect
to enter into additional convertible note hedge transactions and
additional warrant transactions with the counterparties with
respect to the relevant series of notes as to which the option was
exercised.
We expect that, in connection with establishing
their initial hedge of the convertible note hedge transactions and
warrant transactions, the counterparties will enter into various
derivative transactions with respect to our common stock
concurrently with, or shortly after, the pricing of the notes. This
activity could also cause or prevent an increase or a decrease in
the market price of our common stock or the notes at that time. In
addition, we expect that the counterparties may modify their hedge
positions by entering into or unwinding various derivatives with
respect to our common stock and/or purchasing or selling shares of
common stock or other securities of ours in secondary market
transactions following the pricing of the notes and prior to the
maturity of each series 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 prevent 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 notes.
Repurchases of Outstanding 2024 Notes and/or
2025 Notes:
Concurrently with the offering of the notes and
from time to time after this offering, we intend to enter into
separate and privately negotiated repurchase transactions (the
“Note Repurchase Transactions”) with one or more holders of our
1.0% Convertible Senior Notes due 2024 (the “2024 notes”) and/or
our 0.25% Convertible Senior Notes due 2025 (the “2025 notes”). The
terms of each separate Note Repurchase Transaction are anticipated
to be individually negotiated with the holders of our 2024 notes
and 2025 notes and will depend on factors including the market
price of our common stock and the trading price of our 2024 notes
and 2025 notes at the time of each Notes Repurchase Transaction. We
expect to settle the Note Repurchase Transactions by delivering a
combination of cash and shares of our common stock in such amounts
that are individually negotiated with the applicable holders of our
2024 notes and 2025 notes. Any repurchase of our outstanding 2024
notes and 2025 notes could affect the market price of our common
stock and, in the case of Note Repurchase Transactions effected
concurrently with this offering, the initial conversion prices of
the 2026 notes and the 2028 notes. We also expect that holders of
our 2024 notes and 2025 notes that sell their 2024 notes and/or
2025 notes in any Note 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 Note
Repurchase Transactions effected concurrently with this offering,
this activity could also impact the initial conversion prices of
the 2026 notes and the 2028 notes.
Unwind of Existing Convertible Note Hedge and
Warrant Transactions:
To the extent we effect the Note Repurchase
Transactions, we also intend to unwind a corresponding portion of
the existing convertible note hedge and warrant transactions we
entered into concurrently with the issuances of the 2024 notes and
the 2025 notes (collectively, the “Unwind Transactions”)
concurrently with this offering and from time to time after this
offering. In connection with the Unwind Transactions, we expect to
enter into agreements with certain existing convertible note hedge
and warrant counterparties (the “existing hedge counterparties”)
to, on a net and aggregate basis, receive cash and/or shares of our
common stock or issue shares of common stock as a termination
payment in respect of the portion of the existing convertible note
hedge and warrant transactions that are unwound. The amount of cash
that we receive and/or the number of shares that we receive or
issue in connection with the Unwind Transactions will be based
generally on the termination value of the unwound portions of such
transactions. We may also unwind the remaining existing convertible
note hedge and warrant transactions with respect to the 2024 notes
and 2025 notes at any time immediately following completion of the
offering of the notes. In connection with the Unwind Transactions,
the existing hedge counterparties may enter into or unwind various
derivatives with respect to our common stock and/or purchase or
sell shares of common stock or other securities of ours in
secondary market transactions. This activity could affect the
market price of our common stock and, in the case of Unwind
Transactions effected concurrently with this offering, this
activity could also impact the initial conversion prices of the
2026 notes and the 2028 notes.
Use of Proceeds:
We intend to use a portion of the net proceeds
of the offering of the 2026 notes and 2028 notes to pay the cost of
the convertible note hedge transactions described above (after such
cost is partially offset by the proceeds to us from the sale of the
warrants described above). If the initial purchasers exercise their
over-allotment option in respect of a series of notes, we expect to
enter into additional convertible note hedge transactions and
warrant transactions relating to such additional notes, and a
portion of the net proceeds from the sale of the additional notes
of such series would be used to pay the costs of such additional
convertible note hedge transactions (which would be partially
offset by the proceeds to us from the sale of additional warrant
transactions).
We also expect to use a portion of the proceeds
of this offering to repurchase a portion of the 2024 notes and/or
2025 notes in separately- and privately-negotiated Note Repurchase
Transactions. We intend to use any remaining net proceeds from the
sale of the notes for other working capital and other general
corporate purposes. In addition, an amount equal to the net
proceeds is expected to finance or refinance, in whole or in part,
existing, new or ongoing eligible green expenditures.
This press release is neither an offer to sell
nor a solicitation of an offer to buy the 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 persons reasonably believed to be qualified institutional buyers
pursuant to Rule 144A under the Securities Act.
About Enphase Energy, Inc.
Enphase is a global energy technology company
and delivers smart, easy-to-use solutions that manage solar
generation, storage and management on a single platform.
Forward-Looking Statements
This 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 counterparties, the Note Repurchase Transactions, the
Unwind Transactions, the completion of the offering of the notes
(including related timing) and the intended use of proceeds, 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 offering 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 Note Repurchase Transactions; changes in the structure
or terms of the Unwind Transactions (or that Enphase will not
complete any Unwind Transactions); and changes in the anticipated
use of the net proceeds of the offering, 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 Contact:Adam
HinckleyEnphase Energy, Inc.Investor
Relationsir@enphaseenergy.com+1-707-763-4784 x7354
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