Eos Energy Enterprises, Inc. Prices Upsized $225,000,000 Convertible Senior Notes Offering

Rhea-AI Summary

Eos Energy Enterprises (NASDAQ: EOSE) has priced an upsized offering of $225 million convertible senior notes due 2030, with a 6.75% annual interest rate. The notes will mature on June 15, 2030, and feature an initial conversion rate of 196.0784 shares per $1,000 principal amount, representing a conversion price of $5.10 per share. The company also announced a concurrent public offering of 18.75 million shares at $4.00 per share. Net proceeds from the notes offering, estimated at $216 million, will be used to repurchase $126 million of existing convertible notes, prepay $50 million of outstanding borrowings, and fund general corporate purposes. The prepayment will reduce the PIK interest rate from 15% to 7% and waive financial covenants until 2027.

Positive

• Successful upsizing of convertible notes offering from $175M to $225M indicates strong investor interest
• Prepayment of $50M borrowings will significantly reduce PIK interest rate from 15% to 7%
• Financial covenants will be waived until 2027, providing operational flexibility
• Refinancing of existing debt structure with more favorable terms

Negative

• Significant dilution potential with conversion price at $5.10, representing only 27.5% premium
• Additional dilution from concurrent public offering of 18.75M shares
• Substantial debt burden with new $225M convertible notes at 6.75% interest rate
• Higher repurchase premium of 110% required if fundamental change occurs before June 2027

Insights

Financial Restructuring Specialist

Eos is significantly restructuring its debt with a larger-than-planned $225M convertible note offering to refinance expensive debt and improve terms.

Eos Energy has successfully upsized its convertible note offering to $225 million from the initially planned $175 million, indicating strong institutional investor interest. The 6.75% notes due 2030 are being sold to qualified institutional buyers, with settlement expected June 3rd.

This financing represents a strategic debt restructuring with three critical objectives:

• Fully repurchasing their existing $126 million convertible note due 2026 for approximately $131 million
• Prepaying $50 million of outstanding credit agreement borrowings
• Funding general corporate purposes with remaining proceeds

The prepayment triggers significant improvements to their credit agreement terms, reducing the PIK interest rate from 15% to 7% and waiving financial covenants until 2027. This dramatically lowers their cost of capital while extending debt maturities.

The notes' 6.75% interest rate reflects market conditions but provides conversion flexibility that benefits both parties. The initial conversion price of $5.10 represents a 27.5% premium over the concurrent public equity offering price of $4.00, balancing dilution concerns with attractive terms for noteholders.

The company has also secured a standstill agreement with CCM Denali Equity Holdings, preventing security transfers until June 2026, adding stability to their capital structure. Combined with their concurrent $75 million equity offering ($86.25 million if overallotment exercised), this comprehensive refinancing extends their runway while significantly improving their debt profile and reducing near-term financial pressure.

EDISON, N.J., May 30, 2025 (GLOBE NEWSWIRE) -- Eos Energy Enterprises, Inc. (NASDAQ: EOSE) (“Eos” or the “Company”) today announced the pricing of its offering of $225,000,000 aggregate principal amount of 6.75% convertible senior notes due 2030 (the “notes”) in a private offering to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”). The offering size was increased from the previously announced offering size of $175,000,000 aggregate principal amount of notes. The issuance and sale of the notes are scheduled to settle on June 3, 2025, subject to customary closing conditions. Eos also granted the initial purchasers of the notes an option to purchase, for settlement within a period of 13 days from, and including, the date the notes are first issued, up to an additional $25,000,000 aggregate principal amount of notes.

The notes will be senior, unsecured obligations of Eos and will accrue interest at a rate of 6.75% per annum, payable semi-annually in arrears on June 15 and December 15 of each year, beginning on December 15, 2025. The notes will mature on June 15, 2030, unless earlier repurchased, redeemed or converted. Before March 15, 2030, noteholders will have the right to convert their notes only upon the occurrence of certain events. From and after March 15, 2030, noteholders may convert their notes at any time at their election until the close of business on the second scheduled trading day immediately before the maturity date. Eos will settle conversions by paying or delivering, as applicable, cash, shares of its common stock or a combination of cash and shares of its common stock, at Eos’s election. The initial conversion rate is 196.0784 shares of common stock per $1,000 principal amount of notes, which represents an initial conversion price of approximately $5.10 per share of common stock. The initial conversion price represents a premium of approximately 27.5% over the public offering price in the concurrent common stock offering described below. The conversion rate and conversion price will be subject to adjustment upon the occurrence of certain events.

The notes will be redeemable, in whole or in part (subject to certain limitations), for cash at Eos’s option at any time, and from time to time, on or after June 20, 2028 and on or before the 41st scheduled trading day immediately before the maturity date, but only if the last reported sale price per share of Eos’s common stock exceeds 130% of the conversion price for a specified period of time and certain other conditions are satisfied. The redemption price will be equal to the principal amount of the notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date.

If a “fundamental change” (as defined in the indenture for the notes) occurs, then, subject to a limited exception, noteholders may require Eos to repurchase their notes for cash. The repurchase price will be equal to (x) 110% (or, if the effective date of such fundamental change is on or after June 15, 2027, 105%) of the principal amount of the notes to be repurchased, plus (y) accrued and unpaid interest, if any, to, but excluding, the applicable repurchase date.

Eos estimates that the net proceeds from the offering of notes will be $216,000,000 (or $240,000,000 if the initial purchasers fully exercise their option to purchase additional notes), after deducting the initial purchasers’ discounts and commissions. Eos intends to use the net proceeds from this offering, together with the net proceeds from the underwritten public offering of common stock referred to below, if it is consummated, (i) to repurchase the full $126 million aggregate principal amount outstanding of its 5%/6% Convertible Senior PIK Toggle Note due 2026 in a privately negotiated transaction for approximately $131 million; (ii) to prepay $50 million of outstanding borrowings due under its credit agreement, dated June 21, 2024, by and between Eos and CCM Denali Debt Holdings, LP (the “Credit Agreement”); and (iii) for general corporate purposes. Upon the prepayment of $50 million of outstanding borrowings under the Credit Agreement, the PIK interest rate under the Credit Agreement will decrease from 15% to 7% and the financial covenants thereunder will be waived until 2027. CCM Denali Equity Holdings, LP has agreed that upon the consummation of the offering it will not transfer any securities issued to it under the Securities Purchase Agreement, dated June 21, 2024, between the Company and CCM Denali Equity Holdings, LP prior to June 21, 2026.

In a separate press release, Eos also announced today the pricing of its previously announced underwritten public offering of 18,750,000 shares of its common stock, plus up to an additional 2,812,500 shares of its common stock that the underwriters of the common stock offering have the option to purchase from Eos, at a public offering price of $4.00 per share. The issuance and sale of the common stock are scheduled to settle on June 2, 2025, subject to customary closing conditions. The completion of the offering of the notes is not contingent on the completion of the offering of common stock, and the completion of the offering of common stock is not contingent on the completion of the offering of the notes. This press release does not constitute an offer to sell, or the solicitation of an offer to buy, any common stock in the public offering.

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 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 shall not constitute an offer to sell, or a solicitation of an offer to buy, the notes or any shares of common stock issuable upon conversion of the notes, nor shall there be any sale of the notes or any such shares, in any state or other jurisdiction in which such an offer, solicitation or sale would be unlawful.

About Eos Energy Enterprises

Eos Energy Enterprises, Inc. is accelerating the shift to American energy independence with positively ingenious solutions that transform how the world stores power. Our breakthrough Znyth™ aqueous zinc battery was designed to overcome the limitations of conventional lithium-ion technology. It is safe, scalable, efficient, sustainable, manufactured in the U.S., and the core of our innovative systems that today provides utility, industrial, and commercial customers with a proven, reliable energy storage alternative for 3 to 12-hour applications. Eos was founded in 2008 and is headquartered in Edison, New Jersey.

Forward-Looking Statements

This press release includes forward-looking statements, including statements regarding the completion of the offering and the expected amount and intended use of the net proceeds. Forward-looking statements represent Eos’s current expectations regarding future events and are subject to known and unknown risks and uncertainties that could cause actual results to differ materially from those implied by the forward-looking statements. Among those risks and uncertainties are market conditions, the satisfaction of the closing conditions related to the offerings and risks relating to Eos’s business, including those described in periodic reports that Eos files from time to time with the SEC. Eos may not consummate the offering described in this press release and, if the offering is consummated, cannot provide any assurances regarding its ability to effectively apply the net proceeds as described above. The forward-looking statements included in this press release speak only as of the date of this press release, and Eos does not undertake to update the statements included in this press release for subsequent developments, except as may be required by law.

Contacts
Investors: ir@eose.com
Media: media@eose.com

FAQ

What is the size and interest rate of EOSE's new convertible notes offering?

EOSE priced an upsized $225 million convertible senior notes offering with a 6.75% annual interest rate, due 2030.

What is the conversion price for EOSE's new convertible notes?

The initial conversion price is $5.10 per share, representing a 27.5% premium over the concurrent public offering price.

How will EOSE use the proceeds from the convertible notes offering?

The proceeds will be used to repurchase $126M of existing notes, prepay $50M of outstanding borrowings, and fund general corporate purposes.

What is the size and price of EOSE's concurrent common stock offering?

EOSE is offering 18.75 million shares at $4.00 per share, with an option for underwriters to purchase an additional 2.81M shares.

How does the debt prepayment affect EOSE's interest rates and covenants?

The $50M prepayment will reduce the PIK interest rate from 15% to 7% and waive financial covenants until 2027.