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Investing.com -- Eos Energy Enterprises Inc (NASDAQ:EOSE) stock dropped 5.4% in premarket trading Wednesday after the company announced plans to offer $500 million in convertible senior notes due 2031.
The energy storage solutions provider said the notes would be offered to qualified institutional buyers, with an additional option for purchasers to buy up to $75 million more. The notes will be senior, unsecured obligations with interest payable semi-annually and will mature on December 1, 2031, unless earlier converted, repurchased, or redeemed.
Eos also announced a concurrent registered direct offering of common stock to a limited number of purchasers. The company plans to use the proceeds from both offerings to repurchase a portion of its outstanding 6.75% convertible senior notes due 2030 and for general corporate purposes.
The notes will be convertible under certain circumstances, with Eos having the option to settle conversions in cash, shares of common stock, or a combination of both. However, until Eos increases its authorized shares of common stock, all conversions will be settled entirely in cash.
The notes will be redeemable at Eos’s option after December 5, 2028, but only if the company’s stock price exceeds 130% of the conversion price for a specified period. The interest rate and initial conversion rate will be determined when the offering is priced.
Goldman Sachs & Co. LLC is acting as the sole placement agent for the common stock offering. Both offerings are subject to market conditions, with the common stock offering contingent on the completion of the notes offering.
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