Ormat Technologies closes $1 billion convertible notes offering

Ormat Technologies Inc. (NYSE: ORA) completed a $1 billion private offering of convertible senior notes, the geothermal company announced. The offering includes $825 million of Series A Notes and $175 million of Series B Notes following the full exercise of initial purchasers' option to purchase additional notes.

The Series A Notes carry a 1.50% annual interest rate payable semi-annually, while the Series B Notes bear no regular interest. Both series mature on March 15, 2031, unless earlier converted, redeemed or repurchased. The notes were sold to qualified institutional buyers under Rule 144A of the Securities Act.

Holders of Series B Notes can require the company to repurchase their notes on March 15, 2027, at 100% of principal amount plus any accrued special interest. The initial conversion price for both series reflects a 30% premium over the company's stock price at pricing.

Ormat used approximately $287.9 million of net proceeds and $25 million cash on hand, along with issuing about 0.6 million common shares, to repurchase approximately $285.9 million of its existing 2.50% convertible senior notes due 2027 through private transactions. The company allocated an additional $25 million to share repurchases, with remaining proceeds designated for general corporate purposes.

"This strategic capital raise strengthens our balance sheet and enhances our ability to grow our business," said Doron Blachar, Chief Executive Officer, according to the company's statement.

Ormat operates as a vertically integrated geothermal and recovered energy generation company with expansion plans in energy storage. The company owns a total generating portfolio of 1,835MW, including 1,340MW of geothermal and solar generation assets across the United States, Kenya, Guatemala, Indonesia, Honduras, and Guadeloupe, plus a 495MW energy storage portfolio in the United States.

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