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Investing.com -- Bloom Energy Corp (NYSE:BE) stock fell 3.5% on Thursday after the company announced its intention to offer $1.75 billion in convertible senior notes due 2030 in a private offering to qualified institutional buyers.
The zero-interest convertible notes will mature on November 15, 2030, unless earlier repurchased, redeemed, or converted. Bloom Energy plans to grant initial purchasers an option to buy up to an additional $250 million principal amount of notes within 13 days of the initial issuance.
According to the company’s announcement, the notes will be senior, unsecured obligations that will not bear regular interest, and the principal amount will not accrete. Noteholders will have the right to convert their notes under certain circumstances, with Bloom Energy settling conversions through cash, shares of its Class A common stock, or a combination of both, at the company’s discretion.
Bloom Energy intends to use a portion of the net proceeds to pay for the cash component of concurrent exchange transactions with holders of its existing 3.00% Green Convertible Senior Notes due 2028 and 2029. The remainder will fund general corporate purposes, including research and development, sales and marketing activities, manufacturing expansion, and capital expenditures.
The company noted that following the offering, it may engage in additional exchanges, repurchases, or induced conversions of the existing convertible notes. Holders participating in these transactions may purchase or sell shares of Bloom Energy’s Class A common stock in the open market to adjust their hedge positions.
The notes will be redeemable at Bloom Energy’s option on or after November 20, 2028, but only if the stock price exceeds 130% of the conversion price for a specified period and other conditions are met.
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