CHANTILLY, Va. - Parsons Corporation (NYSE: NYSE:PSN), a technology provider in the national security and infrastructure sectors, has priced a private offering of $700M in convertible senior notes due in 2029. The notes, bearing an interest rate of 2.625% per annum, are set to settle around February 26, 2024, with expectations to generate net proceeds of approximately $683.7M after initial purchaser discounts and estimated offering expenses.
The company has also engaged in capped call transactions to mitigate potential dilution from the notes conversion. Furthermore, Parsons has granted the initial purchasers an option to buy up to an additional $100M in notes within a 13-day period post-issuance.
The notes will be senior unsecured obligations, convertible under certain conditions before October 1, 2028, and freely convertible close to the maturity date. Upon conversion, holders will be settled in cash and, if applicable, Parsons common stock. The conversion rate starts at 10.6256 shares per $1,000 principal amount, representing a 25% premium over Parsons' last reported stock price as of February 21, 2024.
Parsons may redeem the notes for cash partially or in full after March 8, 2027, given certain market price conditions. The proceeds from the offering are intended to fund the costs of the capped call transactions, repurchase portions of existing convertible notes due in 2025, and for general corporate purposes, including potential acquisitions and working capital.
The repurchase of existing notes and the unwind of related call spread transactions could influence Parsons' common stock market price, potentially affecting the notes' trading price and initial conversion price.
The offering targets qualified institutional buyers under Rule 144A of the Securities Act of 1933, as amended, with the securities not registered under the Securities Act or state securities laws, and are subject to sale only under exemption or non-subject transactions to registration requirements.
This announcement is based on a press release statement and does not constitute an offer to sell or a solicitation of an offer to buy securities.
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