Eos Energy upsizes convertible notes offering to $225 million

Published 30/05/2025, 11:22
Eos Energy upsizes convertible notes offering to $225 million

EDISON, N.J. - Eos Energy Enterprises, Inc. (NASDAQ: EOSE), a battery technology company with a market capitalization of $1.03 billion, announced today the pricing of its private offering of $225 million in convertible senior notes, an increase from the initially planned $175 million. According to InvestingPro data, the company has been experiencing strong revenue growth of 37.6% but faces challenges with cash burn, making this offering particularly significant for its operations. The notes, bearing an interest rate of 6.75%, are due in 2030 and the sale is expected to close on June 3, 2025, subject to standard closing conditions.

The notes are senior unsecured obligations and will pay interest semi-annually with the first payment due on December 15, 2025. They will mature on June 15, 2030, unless repurchased, redeemed, or converted earlier. InvestingPro analysis shows the company currently operates with a moderate debt level and maintains a healthy current ratio of 2.05, indicating sufficient liquidity to meet short-term obligations. Noteholders have the right to convert their notes under certain conditions before March 15, 2030, and at any time after that date until just before the maturity date.

The conversion rate is set at 196.0784 shares of common stock per $1,000 principal amount of notes, which is equivalent to an initial conversion price of about $5.10 per share. This price is a 27.5% premium over the concurrent common stock offering price. The conversion rate and price are subject to adjustments in specific situations.

Eos may redeem the notes for cash under certain conditions starting June 20, 2028, and ending shortly before the maturity date. If a "fundamental change" occurs, noteholders may require Eos to repurchase their notes for cash at a price of 110% of the principal amount, plus accrued interest, if the change happens before June 15, 2027, and at 105% after that date.

The net proceeds from the notes, estimated at $216 million (or $240 million if the additional notes option is fully exercised), will be used to repurchase existing convertible notes, prepay a portion of outstanding borrowings, and for general corporate purposes. This will result in a reduction of the interest rate on the remaining Credit Agreement borrowings from 15% to 7% and a waiver of financial covenants until 2027.

Additionally, Eos has priced a separate underwritten public offering of 18.75 million shares of common stock at $4.00 per share, with an option for underwriters to purchase an additional 2.81 million shares. The completion of the note offering is independent of the stock offering, and vice versa.

The offerings of notes and any shares of common stock issuable upon conversion have not been registered under the Securities Act and will be offered only to qualified institutional buyers.

This news is based on a press release statement from Eos Energy Enterprises. With a beta of 2.12, EOSE stock exhibits significant volatility compared to the broader market. For deeper insights into Eos Energy’s financial health and growth prospects, including 15 additional ProTips and comprehensive valuation metrics, investors can access the full analysis through InvestingPro’s detailed research report, part of its coverage of over 1,400 US stocks.

In other recent news, Eos Energy Enterprises, Inc. announced a public offering of 18.75 million shares priced at $4 each, aiming to raise approximately $70.5 million. The proceeds will be used for financial maneuvers, including repurchasing $126 million of convertible senior notes and prepaying $50 million under a credit agreement, which will reduce the PIK interest rate from 15% to 7% and waive financial covenants until 2027. Additionally, Eos Energy plans a separate offering of $175 million in convertible senior notes due 2030, with options for initial purchasers to acquire more. The stock offering and the notes offering are not contingent on each other. Jefferies and J.P. Morgan are leading the stock offering, while the company has secured amended credit agreement terms with its lenders to facilitate these transactions. Furthermore, Eos Energy has reached a Limited Consent Agreement with the Department of Energy, allowing the proposed offerings and the use of proceeds. These developments reflect Eos Energy’s strategic financial maneuvers as it navigates its capital structure.

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