Rocket Lab Closes Upsized Offering of Convertible Senior Notes
Strategic Move Adds Funding for Company Initiatives
Rocket Lab has closed its private offering of $355.0 million principal amount of 4.250% convertible senior notes due 2029 (the “notes”) to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”) and related capped call transactions. The offering represents the aggregate of both the previously announced, upsized offering of $300.0 million as well as the full exercise of the $55.0 million option to purchase additional notes granted by Rocket Lab to the initial purchasers of the notes.
"We look forward to deploying this capital efficiently and expediently towards a mix of opportunities including potential M&A and other strategic growth and scaling investments.”
Peter Beck, Rocket Lab
“Closing today’s transaction is another exciting step for Rocket Lab as we continue our growth trajectory, and upsizing the offering due to oversubscription is a strong show of confidence," said Rocket Lab founder and CEO, Peter Beck. "This strategic move has added additional funding to the Rocket Lab balance sheet at what we view as the most attractive cost of capital available and least dilutive path for our existing shareholders. We look forward to deploying this capital efficiently and expediently towards a mix of opportunities including potential M&A and other strategic growth and scaling investments.”
Key Elements of the Transaction
$300.3 million of net proceeds after adjusting for $43.2 million of capped call costs and approximately $11.5 million of underwriting costs and estimated offering expenses
Interest rate of 4.25% per year, payable semi-annually in arrears on February 1 and August 1 of each year, beginning August 1, 2024
Initial conversion rate of 195.1029 shares of common stock per $1,000 principal amount of notes, which represents a conversion price of approximately $5.13 per share
The notes will not be redeemable before February 1, 2027
Effective conversion price of $8.04 after giving effect to the capped call transactions
Use of Net Proceeds
Approximately $40m to repay a portion of its borrowings under its equipment financing agreement, including accrued and unpaid interest on such borrowings
Working capital or other general corporate purposes, which may include potential acquisitions and other strategic transactions
The notes were offered only to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A under the Securities Act. The offer and sale of the notes and any shares of common stock issuable upon conversion of the notes have not been, and will not be, registered under the Securities Act or any other securities laws, and the notes and any such shares cannot be offered or sold absent registration or except pursuant to an applicable exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and any other applicable securities laws. This press release does not constitute an offer to sell, or the solicitation of an offer to buy, the notes or any shares of common stock issuable upon conversion of the notes, nor will there be any sale of the notes or any such shares, in any state or other jurisdiction in which such offer, sale or solicitation would be unlawful.