PureCycle greenshoe lifts 7.25% green convertibles to $250 million

By Marisa Wong

Los Angeles, Aug. 24 – The initial purchaser of PureCycle Technologies Inc.’s 7.25% green convertible notes due 2030 exercised its $35 million over-allotment option in full on Aug. 22, bringing the total issue size to $250 million, according to an 8-K filing with the Securities and Exchange Commission.

PureCycle priced an upsized $215 million of the seven-year green convertible notes after the market close on Aug. 21 with a discounted offer price of 90 and an initial conversion premium of 50%, as previously reported.

Pricing came in line with talk for a discounted offer price of 90, richer than talk for a fixed coupon of 7.5% and in line with talk for a fixed initial conversion premium of 50%, according to a market source.

Oppenheimer & Co. Inc. was bookrunner for the Rule 144A offering.

The initial size of the offering was $200 million with a greenshoe of $30 million.

The notes will be accretive for the first four years and reach par on Aug. 15, 2027.

The notes are non-callable until Aug. 20, 2025 and then subject to a 130% hurdle.

The notes are putable at par on Aug. 15, 2027 or upon a fundamental change.

The convertibles will be settled in cash, shares or a combination of both at the company’s option.

Entities affiliated with Sylebra Capital Management will purchase $50 million of the notes upon maturity with the company’s fiscal adviser to purchase $5 million.

Net proceeds were about $219.25 million. The deal settled on Thursday.

Proceeds will be used to finance or refinance eligible green projects, including construction of a multi-line purification facility in Augusta, Ga., and for general corporate purposes.

PureCycle is an Orlando, Fla.-based company specializing in a purification recycling technology that transforms No. 5 plastics into renewable energy.

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