Atlas Energy Solutions increased the size of its convertible note offering by 30% to $390 million from the $300 million it had previously announced, pricing 0.50% senior notes due 2031.
The company said it expects net proceeds of about $377 million, rising to about $435 million if the initial purchasers exercise their full $60 million option for additional notes. Atlas plans to use about $43 million of the proceeds, or about $50 million if the option is fully exercised, to fund capped call transactions.
It also said it will use about $66 million to repay outstanding advances under its master lease agreement and interim funding agreement with Stonebriar Commercial Finance, including a $5 million termination fee, and about $75 million to repay borrowings under its 2023 ABL credit facility. The remainder is earmarked for general corporate purposes, including purchases of power generation equipment under its global framework agreement with Caterpillar.
The notes carry a 0.50% annual interest rate and mature on April 15, 2031. The initial conversion rate is 68.9275 shares per $1,000 principal amount, implying a conversion price of about $14.51 per share, roughly 30% above Atlas’s April 6 closing price of $11.16.
The capped call transactions have an initial cap price of $22.32 per share, which is 100% above the April 6 stock price. Atlas said the notes were upsized from the original $300 million plan, and the initial purchasers also received a 13-day option to buy up to another $60 million of notes. Following these announcements, the company's shares moved 3.25%, and are now trading at a price of $14.00. For the full picture, make sure to review Atlas Energy Solutions's 8-K report.
