Lucid Group, Inc. Announces Proposed Convertible Senior Notes Offering
Lucid Group (LCID) has announced plans to offer $1 billion in convertible senior notes due 2030, with an additional $100 million option for initial purchasers. The notes will be senior, unsecured obligations with semi-annual interest payments, maturing on April 1, 2030.
The company plans to use the proceeds to repurchase a portion of its outstanding 1.25% Convertible Senior Notes due 2026 and fund capped call transactions. The notes will be convertible under certain conditions, with Lucid having the flexibility to settle conversions in cash, common stock, or a combination thereof.
In conjunction with the offering, Lucid will enter into capped call transactions to reduce potential dilution. Additionally, Ayar Third Investment Company, a subsidiary of Saudi Arabia's Public Investment Fund, will enter into a prepaid forward transaction that could influence LCID's stock price during the notes' pricing.
Lucid Group (LCID) ha annunciato piani per offrire 1 miliardo di dollari in obbligazioni convertibili senior con scadenza nel 2030, con un'opzione aggiuntiva di 100 milioni di dollari per i compratori iniziali. Le obbligazioni saranno obbligazioni senior, non garantite, con pagamenti di interessi semestrali, in scadenza il 1 aprile 2030.
L'azienda prevede di utilizzare i proventi per riacquistare una parte delle sue obbligazioni senior convertibili all'1,25% in scadenza nel 2026 e finanziare transazioni di capped call. Le obbligazioni saranno convertibili a determinate condizioni, con Lucid che avrà la flessibilità di liquidare le conversioni in contante, azioni ordinarie o una combinazione di entrambi.
In concomitanza con l'offerta, Lucid entrerà in transazioni di capped call per ridurre la potenziale diluizione. Inoltre, Ayar Third Investment Company, una sussidiaria del Fondo Pubblico di Investimento dell'Arabia Saudita, entrerà in una transazione di forward prepagato che potrebbe influenzare il prezzo delle azioni di LCID durante la determinazione del prezzo delle obbligazioni.
Lucid Group (LCID) ha anunciado planes para ofrecer 1 mil millones de dólares en notas senior convertibles con vencimiento en 2030, con una opción adicional de 100 millones de dólares para los compradores iniciales. Las notas serán obligaciones senior, no garantizadas, con pagos de intereses semestrales, que vencerán el 1 de abril de 2030.
La empresa planea utilizar los ingresos para recomprar una parte de sus notas senior convertibles al 1,25% que vencen en 2026 y financiar transacciones de capped call. Las notas serán convertibles bajo ciertas condiciones, con Lucid teniendo la flexibilidad de liquidar las conversiones en efectivo, acciones comunes o una combinación de ambos.
En conjunto con la oferta, Lucid participará en transacciones de capped call para reducir la posible dilución. Además, Ayar Third Investment Company, una subsidiaria del Fondo de Inversión Pública de Arabia Saudita, entrará en una transacción de forward prepagado que podría influir en el precio de las acciones de LCID durante la fijación del precio de las notas.
루시드 그룹 (LCID)는 2030년 만기 convertible senior notes를 10억 달러 규모로 발행할 계획을 발표했으며, 초기 구매자를 위한 추가 1억 달러 옵션도 포함된다. 이 노트는 반기 이자 지급이 있는 선순위 무담보 채무로, 2030년 4월 1일에 만기가 된다.
회사는 이 자금을 사용하여 2026년 만기 1.25% convertible senior notes의 일부를 재매입하고 capped call 거래에 자금을 지원할 계획이다. 이 노트는 특정 조건 하에 전환 가능하며, 루시드는 전환을 현금, 보통주 또는 이들의 조합으로 정산할 수 있는 유연성을 가진다.
제공과 함께 루시드는 잠재적 희석을 줄이기 위해 capped call 거래에 참여할 것이다. 또한, 사우디 아라비아의 공공 투자 기금의 자회사인 Ayar Third Investment Company는 노트 가격 책정 동안 LCID의 주가에 영향을 미칠 수 있는 선불 선도 거래에 참여할 것이다.
Lucid Group (LCID) a annoncé des projets d'émission de 1 milliard de dollars d'obligations senior convertibles arrivant à échéance en 2030, avec une option supplémentaire de 100 millions de dollars pour les premiers acheteurs. Les obligations seront des obligations senior, non garanties, avec des paiements d'intérêts semestriels, arrivant à échéance le 1er avril 2030.
L'entreprise prévoit d'utiliser les produits pour racheter une partie de ses obligations senior convertibles à 1,25 % arrivant à échéance en 2026 et financer des transactions de capped call. Les obligations seront convertibles sous certaines conditions, Lucid ayant la flexibilité de régler les conversions en espèces, en actions ordinaires ou en une combinaison des deux.
En lien avec l'offre, Lucid s'engagera dans des transactions de capped call pour réduire la dilution potentielle. De plus, Ayar Third Investment Company, une filiale du Fonds d'Investissement Public d'Arabie Saoudite, participera à une transaction de forward prépayée qui pourrait influencer le prix de l'action de LCID pendant la fixation du prix des obligations.
Lucid Group (LCID) hat Pläne angekündigt, 1 Milliarde Dollar in wandelbaren vorrangigen Anleihen mit Fälligkeit im Jahr 2030 anzubieten, mit einer zusätzlichen Option von 100 Millionen Dollar für Erstkäufer. Die Anleihen werden vorrangige, unbesicherte Verpflichtungen mit halbjährlichen Zinszahlungen sein, die am 1. April 2030 fällig werden.
Das Unternehmen plant, die Einnahmen zu nutzen, um einen Teil seiner ausstehenden 1,25% wandelbaren vorrangigen Anleihen mit Fälligkeit 2026 zurückzukaufen und capped call-Transaktionen zu finanzieren. Die Anleihen werden unter bestimmten Bedingungen wandelbar sein, wobei Lucid die Flexibilität hat, Wandlungen in bar, Stammaktien oder einer Kombination davon abzuwickeln.
Im Zusammenhang mit dem Angebot wird Lucid capped call-Transaktionen eingehen, um eine potenzielle Verwässerung zu reduzieren. Darüber hinaus wird die Ayar Third Investment Company, eine Tochtergesellschaft des öffentlichen Investitionsfonds Saudi-Arabiens, in eine vorab bezahlte Forward-Transaktion eintreten, die den Aktienkurs von LCID während der Preisfestsetzung der Anleihen beeinflussen könnte.
- Strategic refinancing of existing debt through new 2030 notes
- Implementation of capped call transactions to minimize shareholder dilution
- Support from major shareholder (PIF) through Ayar's prepaid forward transaction
- Increased long-term debt obligation of up to $1.1 billion
- Potential future dilution if notes are converted to common stock
- Additional interest payment obligations impacting cash flow
Insights
Lucid's $1 billion convertible notes offering (with potential for $1.1 billion including the additional option) represents a significant financial maneuver aimed at restructuring debt rather than primarily raising new capital. This transaction equals roughly 13-14% of Lucid's current
The primary purpose appears to be refinancing existing debt by repurchasing portions of their 2026 notes, effectively extending their debt maturity timeline by four years. This gives Lucid critical additional runway to scale production and potentially reach profitability before facing major debt maturities.
The accompanying capped call transactions serve as a defensive mechanism against shareholder dilution. These derivative contracts effectively raise the conversion price, reducing the number of shares Lucid would need to issue if noteholders convert. This suggests management is protecting current shareholders while securing needed financing flexibility.
The involvement of Ayar (Saudi PIF subsidiary) through a prepaid forward transaction demonstrates continued support from Lucid's largest investor while potentially creating favorable conditions for pricing the convertible notes. This structure could temporarily stabilize or boost Lucid's stock during the offering period, potentially resulting in more favorable conversion terms.
This financial restructuring doesn't address Lucid's fundamental production challenges or cash burn rate, but does provide valuable breathing room for execution. The transaction indicates sophisticated treasury management while suggesting Lucid needs more time before reaching self-sustaining operations.
This convertible note offering showcases sophisticated financial engineering aimed at balance sheet optimization rather than growth capital. By pushing
The structure reveals three coordinated transactions working in concert:
- New 2030 convertible notes issuance
- Partial repurchase of existing 2026 notes
- Capped call transactions as an anti-dilution mechanism
The capped calls deserve particular attention as they effectively raise the conversion premium, creating a higher threshold before dilution occurs. This indicates management's focus on protecting equity value while accessing debt markets.
The Ayar prepaid forward transaction adds complexity but serves dual purposes: facilitating hedging for note investors while potentially supporting the conversion price. This could result in more favorable terms for Lucid by reducing the ultimate dilution potential of these notes.
While the interest rate remains undetermined, Lucid is likely timing this offering strategically. By addressing its capital structure proactively, management avoids potential liquidity concerns that could emerge if they waited until closer to the 2026 maturity date.
This transaction buys Lucid valuable time but doesn't alter the fundamental need to accelerate production, increase deliveries, and achieve positive cash flow before these new obligations come due in 2030.
The Notes
The notes will be senior, unsecured obligations of Lucid, will accrue interest payable semi-annually in arrears, and will mature on April 1, 2030, unless earlier repurchased, redeemed, or converted. Noteholders will only have the right to convert their notes in certain circumstances and during specified periods. Lucid will settle conversions of notes by paying or delivering, as applicable, cash, shares of its Class A common stock, or a combination of cash and shares of its common stock, at Lucid's election. The notes will be redeemable, in whole or in part (subject to certain limitations), for cash at Lucid's option at any time, and from time to time, on or after April 6, 2028 and on or before the 31st scheduled trading day immediately before the maturity date, but only if the last reported sale price per share of Lucid's common stock exceeds
Lucid intends to use the net proceeds of the offering, after deducting the initial purchasers' discounts and commissions and its estimated offering expenses, to (i) repurchase a portion of its outstanding
Capped Call Transactions
In connection with the offering, Lucid expects to enter into privately negotiated capped call transactions with one or more of the initial purchasers of the notes or their respective affiliates and/or other financial institutions. The capped call transactions will cover, subject to anti-dilution adjustments substantially similar to those applicable to the notes, the number of shares of Lucid's common stock that will initially underlie the notes. The capped call transactions are expected generally to reduce potential dilution to Lucid's common stock upon conversion of the notes and/or offset any cash payments that Lucid could be required to make in excess of the principal amount of any converted notes upon conversion thereof, as the case may be, with such reduction and/or offset subject to a cap. If the initial purchasers exercise their option to purchase additional notes, Lucid expects to enter into additional capped call transactions with the capped call counterparties.
Repurchases of Outstanding 2026 Notes
Concurrently with the offering, Lucid expects to enter into one or more separate and individually negotiated transactions with one or more holders of the 2026 notes to repurchase for cash a portion of the 2026 notes on terms to be negotiated with each holder.
Ayar Prepaid Forward Transaction
In connection with the pricing of the notes, Lucid expects Ayar Third Investment Company ("Ayar"), a wholly-owned subsidiary of the Public Investment Fund of
The prepaid forward transaction is generally intended to facilitate privately negotiated derivative transactions, including swaps, between the forward counterparty or its affiliates and investors in the notes relating to Lucid's common stock by which investors in the notes will hedge their investments in the notes. Ayar's entry into the prepaid forward transaction with the forward counterparty and the entry by the forward counterparty into derivative transactions in respect of Lucid's common stock with the investors of the notes could have the effect of increasing (or reducing the size of any decrease in) the market price of Lucid's common stock concurrently with, or shortly after, the pricing of the notes and effectively raising the initial conversion price of the notes.
The offer and sale of the notes and any shares of Lucid's 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 except pursuant to an 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 Lucid's 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.
Additional information about the transactions described in this press release can be found in the Current Report on Form 8-K that Lucid intends to file with the Securities and Exchange Commission on the same date of this press release.
About Lucid Group
Lucid (NASDAQ: LCID) is a Silicon Valley-based technology company focused on creating the most advanced EVs in the world. The award-winning Lucid Air and new Lucid Gravity deliver best-in-class performance, sophisticated design, expansive interior space and unrivaled energy efficiency. Lucid assembles both vehicles in its state-of-the-art, vertically integrated factory in
Investor Relations Contact
Media Contact
Forward-Looking Statements
This communication includes "forward-looking statements" within the meaning of the "safe harbor" provisions of the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the use of words such as "estimate," "plan," "project," "forecast," "intend," "will," "shall," "expect," "anticipate," "believe," "seek," "target," "continue," "could," "may," "might," "possible," "potential," "predict" or other similar expressions that predict or indicate future events or trends or that are not statements of historical matters. These forward-looking statements include, but are not limited to, statements regarding the anticipated terms of the notes being offered, the completion, timing and size of the proposed offering and capped call transactions, the anticipated effects of entering into the capped call transactions, the intended use of the net proceeds from the offering, including the 2026 notes repurchases, and the anticipated terms of the prepaid forward transaction. Actual events and circumstances may differ from these forward-looking statements. These forward-looking statements are subject to a number of risks and uncertainties. Among those risks and uncertainties are market conditions, including market interest rates, the trading price and volatility of Lucid's common stock and risks relating to Lucid's business, including those factors discussed under the heading "Risk Factors" in Part I, Item 1A of Lucid's Annual Report on Form 10-K for the year ended December 31, 2024, as well as in other documents Lucid has filed or will file with the Securities and Exchange Commission. If any of these risks materialize or Lucid's assumptions prove incorrect, actual results could differ materially from the results implied by these forward-looking statements. There may be additional risks that Lucid currently does not know or that Lucid currently believes are immaterial that could also cause actual results to differ from those contained in the forward-looking statements. Lucid may not consummate the proposed offering described in this press release and, if the proposed offering is consummated, cannot provide any assurances regarding the final terms of the offering or the notes or its ability to effectively apply the net proceeds as described above. In addition, forward-looking statements reflect Lucid's expectations, plans or forecasts of future events and views as of the date of this communication. Lucid anticipates that subsequent events and developments will cause Lucid's assessments to change. However, while Lucid may elect to update these forward-looking statements at some point in the future, Lucid specifically disclaims any obligation to do so. Accordingly, undue reliance should not be placed upon the forward-looking statements.
View original content to download multimedia:https://www.prnewswire.com/news-releases/lucid-group-inc-announces-proposed-convertible-senior-notes-offering-302418994.html
SOURCE Lucid Group
FAQ
What is the size of Lucid's (LCID) new convertible notes offering in 2030?
When will Lucid's (LCID) 2030 convertible notes mature?
How will Lucid (LCID) use the proceeds from the 2030 convertible notes?
What measures is Lucid (LCID) taking to protect against stock dilution from the convertible notes?
