Item 1.01 Entry into a Material Definitive Agreement.
Purchase Agreement
On January 25, 2021, Sunrun Inc. (the "Company") entered into a purchase
agreement (the "Purchase Agreement") with Credit Suisse Securities (USA) LLC and
Morgan Stanley & Co. LLC, as representatives of the several initial purchasers
named in Schedule A thereto (the "Purchasers"), to issue and sell $350 million
aggregate principal amount of 0% Convertible Senior Notes due 2026 (the "Notes")
in a private placement to qualified institutional buyers pursuant to Rule 144A
under the Securities Act of 1933, as amended (the "Securities Act"). The Notes
were sold to the Purchasers pursuant to an exemption from the registration
requirements of the Securities Act afforded by Section 4(a)(2) of the Securities
Act. In addition, the Company granted the Purchasers an option to purchase,
during a 13-day period beginning on, and including, the date on which the Notes
were first issued, up to an additional $50 million aggregate principal amount of
Notes on the same terms and conditions. The Purchasers exercised their option in
full on January 26, 2021. The net proceeds from the sale of the Notes issued on
January 28, 2021 (after deducting the Purchasers' discount and estimated
offering expenses) was approximately $389.0 million.
The Purchase Agreement includes customary representations, warranties and
covenants by the Company and customary closing conditions. Under the terms of
the Purchase Agreement, the Company has agreed to indemnify the Purchasers
against certain liabilities.
The foregoing description of the Purchase Agreement is qualified in its entirety
by reference to the Purchase Agreement attached as Exhibit 10.1 to this Current
Report on Form 8-K and incorporated herein by reference.
Indenture
On January 28, 2021, the Company entered into an Indenture (the "Indenture"), by
and between the Company and Wells Fargo Bank, National Association, as trustee
(the "Trustee"), pursuant to which the Company issued $400 million aggregate
principal amount of Notes. The Notes will not bear regular interest, and the
principal amount of the notes will not accrete. The Notes may bear special
interest under specified circumstances relating to the Company's failure to
comply with its reporting obligations under the Indenture or if the Notes are
not freely tradeable as required by the Indenture. The Notes will mature on
February 1, 2026, unless earlier repurchased by the Company, redeemed by the
Company or converted pursuant to their terms.
The initial conversion rate of the Notes is 8.4807 shares of the Company's
common stock, par value $0.0001 per share ("Common Stock"), per $1,000 principal
amount of Notes (which is equivalent to an initial conversion price of
approximately $117.91 per share). The conversion rate will be subject to
adjustment upon the occurrence of certain specified events but will not be
adjusted for any accrued and unpaid special interest. In addition, upon the
occurrence of a make-whole fundamental change (as defined in the Indenture) or
an issuance of a notice of redemption, the Company will, in certain
circumstances, increase the conversion rate by a number of additional shares for
a holder that elects to convert its Notes in connection with such make-whole
fundamental change or notice of redemption.
Prior to the close of business on the business day immediately preceding
November 1, 2025, the Notes will be convertible only under the following
circumstances: (1) during any calendar quarter commencing after March 31, 2021,
and only during such calendar quarter, if the last reported sale price of the
Common Stock for at least 20 trading days (whether or not consecutive) in a
period of 30 consecutive trading days ending on, and including, the last trading
day of the immediately preceding calendar quarter is greater than or equal to
130% of the conversion price on each applicable trading day; (2) during the five
business-day period after any five consecutive trading-day period in which the
trading price per $1,000 principal amount of Notes for each such trading day was
less than 98% of the product of the last reported sale price of the Common Stock
and the conversion rate on each such trading day; (3) if the Company calls the
Notes for redemption, at any time prior to the close of business on the second
scheduled trading day immediately preceding the redemption date; or (4) upon the
occurrence of specified corporate events. On or after November 1, 2025, until
the close of business on the second scheduled trading day immediately preceding
the maturity date, holders of the Notes may convert all or any portion of their
Notes regardless of the foregoing conditions. Upon conversion, the Company will
pay or deliver, as the case may be, either cash, shares of Common Stock or a
combination of cash and shares of Common Stock, at the Company's election.
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The Company may not redeem the Notes prior to February 6, 2024. On or after
February 6, 2024, the Company may redeem for cash all or part of the Notes, at
its option, if the last reported sale price of the Common Stock has been at
least 130% of the conversion price then in effect for at least 20 trading days
(whether or not consecutive) during any 30 consecutive trading-day period
(including the last trading day of such period) ending on, and including, the
trading day immediately preceding the date on which the Company provides a
notice of redemption at a redemption price equal to 100% of the principal amount
of the Notes to be redeemed, plus any accrued and unpaid special interest to,
but excluding, the redemption date. No sinking fund is provided for the Notes.
Upon the occurrence of a fundamental change (as defined in the Indenture) prior
. . .
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
The information set forth under Item 1.01 is incorporated herein by reference.
Item 8.01 Other Events.
Pricing Press Release
On January 26, 2021, the Company issued a press release announcing the pricing
of its offering of $350 million aggregate principal amount of the Notes in a
private placement to qualified institutional buyers pursuant to Rule 144A under
the Securities Act. A copy of the press release is attached as Exhibit 99.1 to
this Current Report on Form 8-K and is incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Exhibit
Number Description
4.1 Indenture, dated January 28, 2021, between Sunrun Inc. and Wells
Fargo Bank, National Association.
4.2 Form of 0% Convertible Senior Note due 2026 (included in Exhibit
4.1).
10.1 Purchase Agreement, dated January 25, 2021, by and among Sunrun Inc.
Credit Suisse Securities (USA) LLC and Morgan Stanley & Co. LLC, as
representatives of the several initial purchasers named in Schedule I
thereto.
10.2 Form of Capped Call Confirmation.
99.1 Press Release, dated January 26, 2021.
104 Cover Page Interactive Data File (the cover page XBRL tags are
embedded within the inline XBRL document)
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