IREN prices upsized $400 million convertible notes offering

Core Viewpoint - IREN Limited has announced a private offering of $400 million in convertible senior notes with a 3.25% coupon rate, aimed at qualified institutional buyers, with the offering size increased from a previously announced $300 million [1][2]. Transaction Details - The offering includes $400 million of convertible senior notes with a 3.25% coupon and a 30% conversion premium [2]. - The notes will settle on December 6, 2024, and initial purchasers have the option to buy an additional $40 million within 13 days of issuance [2]. - The notes will mature on June 15, 2030, and interest will be paid semi-annually starting June 15, 2025 [5]. Use of Proceeds - IREN estimates net proceeds of approximately $386.5 million, or $425.4 million if the option for additional notes is fully exercised [3]. - Approximately $40.3 million will fund capped call transactions, $75.9 million for a prepaid forward transaction, and the remainder for general corporate purposes and working capital [4]. Capped Call Transactions - IREN has entered capped call transactions to hedge against dilution upon conversion of the notes, with an initial cap price of $25.86 per share, representing a 100% premium over the last reported share price [9][10]. - The capped call transactions are expected to reduce potential dilution and offset cash payments required upon conversion [11]. Prepaid Forward Transaction - IREN has also entered a prepaid forward share purchase transaction for approximately $75.9 million of its ordinary shares, to be settled shortly after the notes' maturity [14]. - This transaction is intended to facilitate derivative transactions and allow investors to establish short positions related to IREN's ordinary shares [15]. Company Overview - IREN is a leading data center business focused on Bitcoin mining and AI cloud services, utilizing 100% renewable energy [22]. - The company operates data centers with a capacity of 460MW, expanding to 810MW in H1 2025, and has secured a development portfolio of 2,310MW of grid-connected power across North America [23].