Offering Details - IREN Limited announced its intention to offer $300 million aggregate principal amount of convertible senior notes due 2030 in a private offering to qualified institutional buyers [1] - The company expects to grant initial purchasers an option to purchase up to an additional $45 million principal amount of notes [1] - The notes will be senior, unsecured obligations, accrue interest payable semi-annually, and mature on June 15, 2030 [2] - Noteholders will have the right to convert their notes under certain circumstances, with IREN settling conversions through cash, ordinary shares, or a combination of both [2] Redemption and Repurchase Terms - The notes will be redeemable for cash at IREN's option starting December 20, 2027, if certain conditions are met, including the share price exceeding 130% of the conversion price [3] - In the event of a "fundamental change," noteholders may require IREN to repurchase their notes for cash at the principal amount plus accrued interest [4] Use of Proceeds - IREN plans to use a portion of the net proceeds to fund capped call transactions and a prepaid forward transaction [5] - The remainder of the net proceeds will be used for general corporate purposes and working capital [5] Capped Call Transactions - IREN expects to enter into capped call transactions with option counterparties to reduce potential dilution upon conversion of the notes [6] - The capped call transactions will cover the number of ordinary shares underlying the notes and may be adjusted if additional notes are purchased [6] - These transactions aim to offset potential cash payments exceeding the principal amount of converted notes, subject to a cap price [7] Market Impact and Hedging Activities - Option counterparties may enter into derivative transactions or purchase IREN's ordinary shares to establish initial hedges, potentially affecting the market price of IREN's shares [8][9] - The forward counterparty may modify hedge positions through derivative transactions or secondary market activities, which could influence the market price of IREN's shares and notes [10][16] Prepaid Forward Transaction - IREN expects to enter into a prepaid forward transaction to purchase up to $100 million of its ordinary shares, subject to early settlement [11] - This transaction is intended to facilitate derivative transactions between the forward counterparty and investors, allowing investors to establish short positions in IREN's shares [12] - The prepaid forward transaction could increase the market price of IREN's shares and raise the initial conversion price of the notes [13] Company Overview - IREN is a leading data center business focused on Bitcoin mining, AI cloud services, and next-generation data centers, utilizing 100% renewable energy [19][20] - The company operates 460MW of data centers, with plans to expand to 810MW by H1 2025, and has a development portfolio of 2,310MW of grid-connected power [20] - IREN's Bitcoin mining operations aim to reach 50 EH/s by H1 2025, and its AI cloud services utilize 1,896 NVIDIA H100 & H200 GPUs [20]
IREN announces proposed convertible notes offering
Iris Energy (IREN) GlobeNewswire News Room·2024-12-03 21:01