SunEdison prices $725 million of second lien term loans

Written By: Stratton Report
January 7, 2016

Sunedison

On January 7, SunEdison, Inc. announced the pricing of $725 million of second lien secured term loans. It also entered into a series of exchange agreements with certain holders of its Convertible Senior Notes due 2018, 2020, 2022 and 2025 and its Perpetual Convertible Preferred Stock. The exchange transactions and funding of the amounts under the second lien facilities are expected to close on January 11, 2015,
SunEdison expects to receive $725 million in gross cash proceeds from the Second Lien Facilities.

The proceeds from the second lien facilities will be used in part to repay all of the outstanding indebtedness under the Company’s existing second lien credit facility of approximately $170 million.
The second lien facilities will be comprised of $500 million of A1 loans, and $225 million of A2 loans, each at a rate of LIBOR + 10.0% and will mature on July 2, 2018. Lenders under the A1 portion of the facilities will receive warrants exercisable at any time for 19.8 million shares of common stock, and lenders under the A2 portion of the facilities will receive warrants exercisable at any time for an aggregate of 8.9 million shares of common stock, in each case at an exercise price of $0.01 per share.

The second lien facilities will contain customary covenants, representations and warranties and events of default.

In the exchange transactions, SunEdison will issue $225 million of new senior secured convertible notes due 2018 in exchange for $40.5 million principal amount of the 2020 Notes, $106.9 million principal amount of the 2022 Notes, $97.0 million principal amount of the 2023 Notes and $91.4 million principal amount of the 2025 Notes. It will also issue an estimated 28.0 million shares of common stock in exchange for, $44.3 million principal amount of the 2018 Notes, $71.0 million principal amount of the 2020 Notes, $10.5 million principal amount of the 2021 Notes, $37.0 million principal amount of the 2022 Notes, $43.0 million principal amount of the 2023 Notes and $38.5 million principal amount of the 2025 Notes.

Finally, SunEdison will issue an estimated 11.8 million shares of common stock in exchange for $158.3 million or 158,327 shares of the preferred stock.

In connection with the entry into the second lien facilities, the exchange transactions and the issuance of warrants described above, on January 6, 2016, SunEdison entered into registration rights agreements with holders of the exchange shares and the shares underlying the warrants described above (the “registration rights agreements”). Under the registration rights agreements, SunEdison has agreed to file shelf registration statements (or prospectus supplements to an existing registration statement) to register the resale of such shares.