Advanced Energy Announces Proposed Offering of $500 Million Convertible Senior Notes - Seite 2

The notes will be Advanced Energy’s senior unsecured obligations and will rank senior in right of payment to any of its indebtedness that is expressly subordinated in right of payment to the notes; equal in right of payment to any of its indebtedness that is not so subordinated; effectively junior in right of payment to any of its secured indebtedness to the extent of the value of the assets securing such indebtedness; and structurally junior to all indebtedness and other liabilities (including trade payables) of its subsidiaries. The notes are expected to pay interest semiannually in arrears and to mature on September 15, 2028, unless earlier repurchased, redeemed or converted. The initial conversion rate and other terms of the notes will be determined by negotiations between Advanced Energy and the initial purchasers of the notes.

In connection with the pricing of the notes, Advanced Energy expects to enter into privately negotiated convertible note hedge transactions with the option counterparties. The convertible note hedge transactions will cover, subject to customary anti-dilution adjustments, the same number of shares of common stock that initially underlie the notes.

Advanced Energy also expects to enter into warrant transactions with the option counterparties relating to the same number of shares of common stock, subject to customary anti-dilution adjustments. The convertible note hedge transactions are expected generally to reduce potential dilution to Advanced Energy’s common stock upon any conversion of notes and/or offset any cash payments Advanced Energy is required to make in excess of the principal amount of converted notes, as the case may be. However, the warrant transactions could separately have a dilutive effect to the extent that the market value per share of Advanced Energy’s common stock exceeds the strike price of the warrants.

In connection with establishing their initial hedges of the convertible note hedge and warrant transactions, the option counterparties, or their respective affiliates, expect to purchase shares of the common stock and/or enter into various derivative transactions with respect to the common stock concurrently with or shortly after the pricing of the notes. These activities could have the effect of increasing, or reducing the size of any decline in, the market price of the common stock or the notes at that time. In addition, the option counterparties, or their respective affiliates, may modify their hedge positions by entering into or unwinding various derivative transactions with respect to the common stock and/or by purchasing or selling the common stock or other securities of Advanced Energy in secondary market transactions following the pricing of the notes and prior to the maturity of the notes, and are likely to do so during any observation period related to a conversion of notes. The effect, if any, of these activities on the market price of the common stock or the notes will depend in part on market conditions and cannot be ascertained at this time, but any of these activities could cause or prevent an increase or decline in the market price of the common stock or the notes, which could affect holders’ ability to convert the notes and, to the extent the activity occurs during any observation period related to a conversion of notes, it could affect the number and value of shares of the common stock, if any, that holders will receive upon conversion of the notes.