- Array Technologies (ARRY, Financial) closes $345 million convertible senior notes offering at 2.875% interest, maturing in July 2031.
- Net proceeds of approximately $334.1 million will be used for debt repayment, capped call transactions, and repurchasing of convertible notes.
- The financial restructuring is expected to save approximately $9 million annually in net interest expenses.
Array Technologies, Inc. (ARRY) has successfully closed its upsized offering of $345 million in 2.875% convertible senior notes due July 2031. This significant capital injection is part of the company's strategic move to enhance its financial position and promote long-term growth.
The net proceeds from this offering, approximately $334.1 million, will be allocated across multiple strategic financial initiatives. Firstly, Array intends to repay $232.8 million of its term loan debt, strengthening its balance sheet and extending the maturity profile of its remaining revolving credit facility. This move provides Array with enhanced financial flexibility.
Additionally, Array will allocate $35.1 million of the proceeds to fund capped call transactions, raising the conversion price of the new notes from $8.12 to $12.74 per share. This approach effectively limits the potential dilution, providing substantial protection to shareholders.
Furthermore, Array plans to repurchase $100 million of its 1.00% convertible senior notes due 2028 for $78.3 million. This strategic repurchase at a discount not only creates immediate shareholder value but also reduces potential future dilution.
The culmination of these transactions is expected to generate approximately $9 million in annual net interest expense savings, enhancing Array's free cash flow. This disciplined approach to financial management underscores Array Technologies' commitment to maintaining a robust capital structure amidst a changing interest rate environment.
