Lucid Group, Inc. Announces Closing of Private Offering of $1.1 Billion of Convertible Senior Notes Due 2030
Rhea-AI Summary
Lucid Group (LCID) has successfully closed a $1.1 billion convertible senior notes offering due 2030, including the full exercise of the initial purchasers' $100 million option. The company simultaneously repurchased approximately $1.05 billion of its existing 1.25% convertible notes due 2026.
The new offering features capped call hedges that increase the effective conversion price to $4.80 per share, representing a 100% premium over the last reported stock price of $2.40. The net proceeds of approximately $1.08 billion were allocated as follows: $118.3 million for capped call transactions, $935.6 million for existing notes repurchase, with the remainder designated for general corporate purposes.
The deal structure, supported by PIF through a prepaid forward share purchase, aims to minimize dilution impact on existing shareholders. Lucid maintains flexibility to settle future conversions in cash, stock, or a combination thereof.
Positive
- Strategic refinancing extends debt maturity from 2026 to 2030
- Capped call structure provides 100% premium protection against dilution
- PIF's continued strategic support through prepaid forward share purchase
- Flexibility in settlement options (cash, stock, or combination) for future conversions
Negative
- Company taking on $1.1B in new debt obligations
- Potential future dilution if stock price exceeds $4.80 conversion price
- Significant cash outlay ($118.3M) required for capped call hedges
News Market Reaction – LCID
On the day this news was published, LCID gained 9.91%, reflecting a notable positive market reaction.
Data tracked by StockTitan Argus on the day of publication.
New issue structured efficiently with PIF support from prepaid forward share purchase, 5-year maturity, and capped
call overlay resulting in effective conversion price of
"We are delighted to have completed this offering, which better positions Lucid for future growth and success, while strengthening our already close partnership with the PIF, and minimizing any effect to existing shareholders," said Taoufiq Boussaid, Chief Financial Officer at Lucid. "The support of the PIF continues to be one of Lucid's key strategic differentiators as we work together toward a more sustainable future."
In connection with the offering, Lucid purchased capped call hedges to increase the effective conversion price of the notes to
The net proceeds from the offering are approximately
Lucid has the optionality to settle any conversions in cash, shares of its Class A common stock, or a combination of cash and shares to further influence potential dilution or cash obligations upon any future conversion of the notes.
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
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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, the anticipated effects of entering into the capped call transactions. 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 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 cannot provide any assurances regarding 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.
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SOURCE Lucid Group
FAQ
What is the size and purpose of Lucid's (LCID) new convertible notes offering in 2025?
How does the capped call structure protect LCID shareholders from dilution?
How much of LCID's 2026 convertible notes were repurchased in this transaction?
What is the net proceeds breakdown of LCID's 2030 convertible notes offering?
