PSN - Parsons Announces Offering Of $700.0 Million Of Convertible Senior Notes Due 2029 | Benzinga
CHANTILLY, Va., Feb. 21, 2024 (GLOBE NEWSWIRE) -- Parsons Corporation (NYSE:PSN) announced today that it intends to offer, subject to market and other conditions, $700.0 million aggregate principal amount of convertible senior notes due 2029 (the "notes") in a private placement. Parsons also expects to grant the initial purchasers in the offering an option to purchase, for settlement within a 13-day period beginning on, and including, the date on which the notes are first issued, up to an additional $100.0 million aggregate principal amount of notes.
The notes will be senior unsecured obligations of Parsons. The notes will accrue interest payable semiannually in arrears on March 1 and September 1 of each year, beginning on September 1, 2024. The notes will mature on March 1, 2029, unless earlier repurchased, redeemed or converted.
Prior to October 1, 2028, the notes will be convertible at the option of the holders only upon the occurrence of specified events, and thereafter until the close of business on the second scheduled trading day immediately preceding the maturity date, the notes will be convertible at any time. Upon conversion, the notes will settle for cash and, if applicable, shares of Parsons' common stock. Parsons may redeem for cash all or any portion of the notes, at its option, on or after March 8, 2027 and before the 51st scheduled trading day immediately before the maturity date, but only if the last reported sale price per share of Parsons' common stock exceeds 130% of the conversion price for a specified period of time. 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. The interest rate, initial conversion rate and other terms of the notes will be determined at the pricing of the offering.
Parsons intends to use a portion of the net proceeds from the sale of the notes to fund the cost of entering into the capped call transactions described below. Additionally, Parsons expects to use a portion of the net proceeds from the offering to repurchase a portion of its outstanding 0.25% Convertible Senior Notes due 2025 (the "Existing Convertible Notes") concurrently with and/or shortly after the pricing of the offering in privately negotiated transactions effected with or through one of the initial purchasers or its affiliate. Parsons intends to use the remainder of the net proceeds from the offering for general corporate purposes, including but not limited to, potential acquisitions and working capital.
If the initial purchasers exercise their option to purchase additional notes, Parsons expects to use a portion of the additional net proceeds to fund the cost of entering into additional capped call transactions as described below. Any remaining proceeds will be used for general corporate purposes, including but not limited to, potential acquisitions and working capital.
Parsons expects that some or all of the holders of the Existing Convertible Notes that are repurchased in the concurrent repurchases described above may enter into or unwind various derivatives with respect to Parsons' common stock or purchase shares of Parsons' common stock in open market transactions to unwind hedge positions they may have with respect to their investment in the Existing Convertible Notes concurrently with and/or shortly after the pricing of the offering. These transactions may place upward pressure on the trading price of Parsons' common stock, causing the common stock to trade at higher prices than would be the case in the absence of these transactions, which could increase the initial conversion price of the notes.
In connection with issuing the Existing Convertible Notes, Parsons entered into convertible note hedge transactions (the "existing convertible note hedge transactions") and warrant transactions (the "existing warrant transactions," and, together with the existing convertible note hedge transactions, the "existing call spread transactions") with certain financial institutions (the "existing option counterparties"). If Parsons repurchases any of its Existing Convertible Notes, then Parsons intends to enter into agreements with the existing option counterparties concurrently with or shortly after the pricing of this offering to terminate a ...