The initial purchasers of the notes are granted an option to purchase, for settlement within a period of 13 days from, and including the date the notes are first issued, up to an additional $55.0 million aggregate principal amount of the notes.
The notes will accrue interest at a rate of 4.250% per annum, payable semi-annually in arrears on February 1 and August 1 of each year, beginning on August 1, 2024.
The notes will mature on February 1, 2029.
The initial conversion rate is 195.1029 shares of common stock per $1,000 principal amount of the notes, which represents an initial conversion price of approximately $5.13 per share of common stock.
The initial conversion price represents a premium of approximately 27.5% above the last reported sale price of the common stock on February 1, 2024.
Rocket Lab estimates that the net proceeds from the offering of the notes will be approximately $290.2 million, and intends to use approximately $36.5 million of the net proceeds from the offering to pay the cost of entering into the capped call transactions; expects to use approximately $40 million of the net proceeds from the offering to repay a portion of its borrowings under its equipment financing agreement and use the remainder of the net proceeds for working capital or other general corporate purposes.
If initial purchasers opt for additional notes, they will use some proceeds for additional capped call transactions and the rest for general corporate purposes.
The offering of the notes is expected to close on February 6, 2024.
Concurrent to the offering, Rocket Lab entered into privately negotiated capped call transactions with certain financial institutions.
The cap price of the capped call transactions will initially be $8.04 per share of common stock, which represents a premium of 100% over the last reported sale price of the common stock on February 1, 2024.
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