MP Materials Corp. (NYSE: MP) has announced its plan to offer $500 million principal amount of convertible senior notes due 2030 through a private offering to qualified institutional buyers. The company also intends to grant the initial purchasers an option to purchase up to an additional $75 million principal amount of notes.
The notes will be senior unsecured obligations of MP Materials, with interest payable semi-annually in arrears on March 1 and September 1 of each year, starting on September 1, 2024. Additionally, the notes will mature on March 1, 2030, unless earlier converted, redeemed, or repurchased.
MP Materials plans to use the net proceeds from the offering for various purposes, including funding the cost of entering into capped call transactions, repurchasing shares of its common stock, repurchasing a portion of its 0.25% green convertible senior notes due 2026, and for general corporate purposes.
In connection with the offering, MP Materials expects to enter into privately negotiated capped call transactions to reduce potential dilution to the common stock upon conversion of the notes and/or offset any cash payments that the company could be required to make in excess of the principal amount of any converted notes upon conversion thereof, with such reduction and/or offset subject to a cap.
Concurrently with the offering, the company expects to enter into one or more separate and individually negotiated transactions with holders of the 2026 notes to repurchase a portion of the 2026 notes on terms to be negotiated with each holder.
MP Materials also plans to repurchase up to $300 million of shares of common stock from purchasers of notes in privately negotiated transactions, at a purchase price per share equal to the last reported share price per share of the common stock on the date of the pricing of the offering.
MP Materials produces specialty materials that are vital inputs for electrification and other advanced technologies, with its mountain pass facility being America’s only scaled rare earth production source. The company is currently expanding its manufacturing operations downstream to provide a full supply chain solution from materials to magnetics.
Today the company's shares have moved -1.2% to a price of $15.29. For more information, read the company's full 8-K submission here.
