Enphase Energy plans $1.0B offering of green convertible senior notes

Enphase Energy Inc. plans to offer $500 million of green convertible notes due 2026 and $500 million of green convertible senior notes due 2028 in a private placement.

Initial purchasers are expected to get a 13-day option to buy up to an additional $50 million of 2026 notes and an additional $50 million of 2028 notes to cover any overallotments.

The notes will be senior, unsecured obligations of Enphase. Interest on the notes is expected to be paid semiannually.

Enphase also expects to enter into convertible note hedge transactions relating to each series of the notes to reduce or offset the potential dilution to the company's common stock upon any conversion.

The company also expects to enter into warrant transactions relating to each series of the notes that could separately have a dilutive effect to the extent that the market value of Enphase common stock exceeds the strike price of the warrants.

The counterparties are expected to enter into various derivative transactions that could cause or prevent an increase or a decrease in the market price of Enphase common stock or the notes. Counterparties may also modify their hedge positions by entering into or unwinding various derivatives.

Concurrently, Enphase plans to enter into separate and privately negotiated repurchase transactions with holders of its 1.0% convertible senior notes due 2024 and/or its 0.25% convertible senior notes due 2025.

Enphase intends to unwind a corresponding portion of the existing convertible note hedge and warrant transactions.

The company expects to enter into agreements with certain existing convertible note hedge and warrant counterparties to receive cash and/or common shares or issue common shares as a termination payment in respect of the portion of the existing convertible note hedge and warrant transactions that are unwound.

Enphase plans to use a portion of the net proceeds from the green note offering to pay the cost of the convertible note hedge transactions.

Further, the company also expects to use a portion of the proceeds to repurchase a portion of the 2024 notes and/or 2025 notes in note repurchase transactions.

The remaining net proceeds will be allocated for other general corporate purposes and to finance or refinance green expenditures.