IREN Limited Successfully Completes $400 Million Note Offering

IREN Limited's New $400 Million Convertible Note Offering

IREN Limited (NASDAQ: IREN) has recently announced a major milestone in its growth story with the pricing of a significant offering of $400 million aggregate principal amount in convertible senior notes due in 2030. This strategic move comes as part of IREN's ongoing commitment to enhance its financial position and support future growth initiatives.

Key Features of the Offering

The offering, which features a competitive 3.25% interest rate and a 30% conversion premium, has been increased from an initial size of $300 million. This adjustment underscores the strong demand from institutional investors, who were able to participate under Rule 144A.

To provide a hedge against potential dilution, IREN has undertaken capped call transactions alongside this offering, which is aimed at reducing the impact of share conversions on existing shareholders. The cap price for these transactions is set at $25.86 per share, an attractive figure reflecting a 100% premium over the last reported sale.

Utilizing the Proceeds Strategically

The expected net proceeds from this offering are estimated to be approximately $386.5 million, and should the initial purchasers fully exercise their purchase options, IREN could see this amount rise to around $425.4 million. These funds will facilitate various initiatives, including approximately $40.3 million earmarked for the capped call transactions, and about $75.9 million designated for a prepaid forward transaction. The remaining proceeds will support general corporate activities and working capital needs.

Understanding the Terms of the Notes

The notes issued will be unsecured obligations, bearing interest of 3.25% annually, payable twice a year. The maturity date for these notes is set for June 15, 2030. Notably, from March 15, 2030, noteholders will have the flexibility to convert their notes at any time until their maturity date, turning them into an essential tool for investors seeking to leverage IREN's growth potential.

Initially, the conversion rate of the notes allows for 59.4919 ordinary shares per $1,000 principal amount, translating to a conversion price of approximately $16.81 per ordinary share. This represents a substantial premium compared to the last sale price of $12.93 on the prior trading date. Adjustments to this rate will apply based on certain events as stipulated in the offering details.

Future Outlook for Shareholders

For investors, the prospect of redeeming these notes starts after December 20, 2027, under specific conditions where the share price exceeds 130% of the conversion price. This is designed to protect both the company and its shareholders, aligning their interests well into the future.

Additional Insights on the Capped Call Transactions

IREN's capped call transactions aim to minimize potential dilution to ordinary shares while counterbalancing any cash payments required under specific scenarios when note conversions take place. Furthermore, these transactions remain solely cash settled until IREN can receive shareholder approval for share repurchases. The flexibility afforded by ongoing negotiations and approvals adds a layer of adaptability for IREN as it navigates its financing strategy.

Innovative Prepaid Forward Transaction

In tandem with the capped call arrangements, IREN has also implemented a prepaid forward share purchase transaction, which will involve the acquisition of shares worth approximately $75.9 million. This forward transaction is designed to assist in managing risk and establishing hedge positions for investors, particularly surrounding the convertible notes.

The strategy behind these transactions suggests that IREN is positioning itself not only to manage funds efficiently but also to enhance investor confidence through structured offerings that anticipate future market conditions. Such diligence in financial planning and strategic deployment of resources signifies IREN's commitment towards its long-term vision.

About IREN Limited

IREN Limited is at the forefront of the data center industry, driving innovation in sectors such as Bitcoin mining and AI cloud services while using 100% renewable energy. The company is rapidly expanding its operations and infrastructure to cater to future technological demands and sustainability standards.

Some key points about IREN's current operations include:

• Bitcoin Mining: IREN is enhancing the security of the Bitcoin network and aims to reach a capacity of 50 EH/s.
• AI Cloud Services: The company has invested in high-performance AI solutions with a substantial number of NVIDIA GPUs.
• Data Center Expansion: IREN operates 460MW of data center facilities and is planning to scale this to 810MW.
• Technology Development: Focused on optimizing performance for both cloud and mining operations.
• Renewable Energy Commitment: IREN targets low-cost renewable energy sources, supporting both local communities and clean energy initiatives.

Frequently Asked Questions

What is the total amount raised by IREN through the offering?

IREN raised $400 million through the convertible note offering, increasing from an initial $300 million.

What is the maturity date for the convertible notes?

The convertible notes will mature on June 15, 2030.

How will the proceeds from the offering be used?

The net proceeds will support capped call transactions, a prepaid forward transaction, and general corporate purposes.

What is the initial conversion price for the notes?

The initial conversion price is approximately $16.81 per share, reflecting a 30% premium.

What is IREN's commitment to renewable energy?

IREN utilizes 100% renewable energy for its operations, emphasizing sustainability in its business model.

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