The cap price of the capped call transactions is initially $49.66 per share of common stock, which represents a premium of approximately 125.0% to the last reported sale price of Stem’s common stock on the NYSE on November 17, 2021, and is subject to certain adjustments under the terms of the capped call transactions. The capped call transactions are expected generally to reduce potential dilution to Stem’s common stock upon any conversion of the Notes and/or offset any potential cash payments Stem is required to make in excess of the principal amount of converted Notes, as the case may be, with such reduction and/or offset subject to a cap. In connection with the pricing of the Notes, Stem has entered into privately negotiated capped call transactions with one or more of the initial purchasers or their affiliates and/or other financial institutions (the “option counterparties”). The Notes will be redeemable, in whole or in part, for cash at Stem’s option at any time, and from time to time, on or after Decemand before the 45th scheduled trading day immediately before the maturity date, but only if the last reported sale price per share of Stem’s common stock exceeds 130% of the conversion price for a specified period of time. The Notes will be convertible upon the satisfaction of specified conditions into cash, shares of common stock of Stem or a combination thereof, with the form of consideration to be determined at Stem’s election. The Notes will be convertible based on an initial conversion rate of 34.1965 shares of Stem’s common stock per $1,000 principal amount of Notes (equivalent to an initial conversion price of approximately $29.24 per share of common stock, which represents a conversion premium of approximately 32.5% to the last reported sale price of Stem’s common stock on The New York Stock Exchange (the “NYSE”) on November 17, 2021).
The Notes will accrue interest payable semi-annually in arrears and will mature on December 1, 2028, unless earlier repurchased, redeemed or converted in accordance with their terms prior to such date. When issued, the Notes will be senior, unsecured obligations of Stem.
The sale of the Notes to the initial purchasers is expected to settle on November 22, 2021, subject to customary closing conditions. In connection with the Offering, Stem has granted the initial purchasers of the Notes an option to purchase, for settlement within a 13-day period from, and including, the date when the Notes are first issued, up to an additional $60 million aggregate principal amount of the Notes on the same terms and conditions. (“Stem”) (NYSE: STEM) announced today the pricing of $400 million aggregate principal amount of 0.50% Green Convertible Senior Notes due 2028 (the “Notes”) in a private offering (the “Offering”), which was upsized from the previously announced $350 million offering, to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”). SAN FRANCISCO-( BUSINESS WIRE)-Stem, Inc.