IREN prices upsized $500 million convertible notes offering

Core Viewpoint - IREN Limited has announced a private offering of $500 million in convertible senior notes with a 3.50% interest rate, due in 2029, aimed at qualified institutional buyers [1][8]. Transaction Details - The offering size was increased from a previously announced $450 million [8]. - The notes will accrue interest at a rate of 3.50% per annum, payable semi-annually starting December 15, 2025, and maturing on December 15, 2029 [5]. - The initial conversion rate is set at 73.3229 ordinary shares per $1,000 principal amount of notes, equating to an initial conversion price of approximately $13.64 per share, representing a 30% premium over the last reported sale price of $10.49 on June 10, 2025 [5][8]. Use of Proceeds - IREN estimates net proceeds from the offering to be approximately $486.1 million, or $534.9 million if the initial purchasers fully exercise their option to purchase additional notes [3]. - The company plans to allocate $48.9 million for capped call transactions, approximately $92.5 million for a prepaid forward transaction, and the remainder for general corporate purposes and working capital [4]. Capped Call Transactions - IREN entered into capped call transactions to hedge against potential dilution upon conversions, with an initial cap price of $20.98 per share, representing a 100% premium over the last reported sale price [8][10]. - The capped call transactions are expected to reduce potential dilution to IREN's ordinary shares upon conversion of the notes [11]. Prepaid Forward Transaction - IREN has also entered into a prepaid forward share purchase transaction for approximately $92.5 million of its ordinary shares, which will settle shortly after the maturity date of the notes [14]. - This transaction is intended to facilitate privately negotiated derivative transactions, allowing investors to establish short positions related to IREN's ordinary shares [16]. Company Overview - IREN is a vertically integrated data center business focused on Bitcoin, AI, and renewable energy, with facilities strategically located in renewable-rich regions across the U.S. and Canada [23]. - The company operates 660MW of data centers, expanding to 885MW in 2025, and is one of the largest Bitcoin producers globally with a capacity of 41 EH/s, set to expand to 50 EH/s [23].