Parsons Announces Pricing Of $700.0 Million Of Convertible Senior Notes Due 2029; Enters into Concurrent Capped Call Transactions to Offset Potential Dilution

CHANTILLY, Va., Feb. 22, 2024 (GLOBE NEWSWIRE) -- Parsons Corporation (NYSE: PSN) announced today the pricing of its private offering of $700.0 million aggregate principal amount of its 2.625% convertible senior notes due 2029 (the “notes”). In connection with the offering, Parsons entered into privately negotiated capped call transactions to offset potential dilution. Parsons also granted 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 sale of the notes to the initial purchasers is expected to settle on or about February 26, 2024, subject to customary closing conditions, and is expected to result in approximately $683.7 million in net proceeds to Parsons, after deducting the initial purchasers’ discount and estimated offering expenses payable by Parsons (assuming no exercise of the initial purchasers’ option to purchase additional notes) but before deducting the cost of the capped call transactions referred to below.

The notes will be senior unsecured obligations of Parsons. The notes will bear interest at a rate of 2.625% per annum, 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.

The initial conversion rate for the notes is 10.6256 shares of Parsons’ common stock per $1,000 principal amount of notes (which is equivalent to an initial conversion price of approximately $94.11 per share, which represents a premium of approximately 25.0% over the last reported sale price of Parsons’ common stock on February 21, 2024). 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.