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Investing.com -- Centrus Energy (NYSE American:LEU) stock plunged 13.6% following the company’s announcement of a planned $650 million convertible senior notes offering.
The nuclear fuel and services provider revealed its intention to offer $650 million in convertible senior notes due 2032 to qualified institutional buyers in a private placement. The company also plans to grant initial purchasers an option to buy up to an additional $100 million in notes on the same terms.
The notes will be senior, unsecured obligations bearing semiannual interest payments beginning February 15, 2026. They will mature on August 15, 2032, unless earlier repurchased, redeemed, or converted. Conversion terms specify that prior to May 15, 2032, note holders can convert only under specific conditions, while after that date conversion will be available at any time.
Upon conversion, Centrus will pay cash up to the aggregate principal amount of the notes being converted and may deliver the remainder of the obligation in cash, shares of Class A common stock, or a combination of both, at the company’s discretion.
The company stated it intends to use the net proceeds from the offering for general corporate purposes. The final terms of the notes, including the initial conversion rate, price, and interest rate, will be determined at pricing.
Investors typically react negatively to convertible note offerings due to potential dilution of existing shares if the notes are eventually converted to equity.
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