Advanced Energy prices $1 billion convertible notes due 2031

Advanced Energy Industries (NASDAQ: AEIS) announced the pricing of $1 billion in 0% convertible senior notes due 2031 in a private offering to qualified institutional buyers. The notes carry a conversion premium of approximately 50% over the company's closing stock price of $339.19 per share on May 13, 2026.

The company expects net proceeds of approximately $980.8 million after deducting discounts and expenses. Initial purchasers received an option to buy an additional $150 million in notes, which could bring total net proceeds to $1.13 billion if exercised in full.

Advanced Energy plans to use $60 million of proceeds for capped call transactions and approximately $442.4 million to exchange existing 2.50% senior convertible notes due 2028. The company will also issue roughly 1.98 million shares as part of exchanging $438.3 million in 2028 convertible notes. Remaining proceeds will fund general corporate purposes, including potential retirement of remaining 2028 notes.

The notes feature an initial conversion rate of 1.9655 shares per $1,000 principal amount, equivalent to a conversion price of approximately $508.78 per share. Advanced Energy may redeem the notes after May 21, 2029, under specific conditions related to stock price performance.

The company entered into capped call transactions with initial purchasers to reduce potential dilution from note conversions. The cap price was set at $678.38 per share, representing a 100% premium over the May 13 closing price.

In connection with the offering, Advanced Energy will unwind portions of existing convertible note hedge and warrant transactions, expecting to receive approximately $44.6 million net from counterparties. The offering is scheduled to close May 18, 2026, subject to customary conditions.

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