MP Materials Announces Proposed Offering of Convertible Notes

MP Materials Corp. (NYSE: MP) (“MP Materials” or the “Company”) today announced that it plans to offer, subject to market and other conditions, $500 million principal amount of its Convertible Senior Notes due 2030 (the “notes”) through a private offering to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”). MP Materials expects to grant the initial purchasers an option to purchase, for settlement within a 13-day period beginning on, and including, the date MP Materials first issues the notes, up to an additional $75 million principal amount of notes.

The notes will be senior unsecured obligations of MP Materials, and interest will be payable semi-annually in arrears on March 1 and September 1 of each year, beginning on September 1, 2024. The notes will mature on March 1, 2030, unless earlier converted, redeemed or repurchased. In certain circumstances and during certain periods, the notes may be converted into cash, shares of MP Materials’ common stock (the “common stock”), or a combination of cash and shares of common stock, at MP Materials’ election.

MP Materials intends to use the net proceeds from the offering of the notes (i) to fund the cost of entering into the capped call transactions described below, (ii) to repurchase up to $300 million of shares of common stock as described below, (iii) to repurchase a portion of its 0.25% green convertible senior notes due 2026 (the “2026 notes”) as described below, and (iv) for general corporate purposes.

In connection with the offering, MP Materials expects to enter into privately negotiated capped call transactions with one or more of the initial purchasers of the notes, their respective affiliates and/or other financial institutions (the “capped call counterparties”). The capped call transactions will cover, subject to anti-dilution adjustments substantially similar to those applicable to the notes, the number of shares of the common stock that will initially underlie the notes, assuming the initial purchasers do not exercise their option to purchase additional notes. The capped call transactions are expected generally to reduce potential dilution to the common stock upon conversion of the notes and/or offset any cash payments that MP Materials could be required to make in excess of the principal amount of any converted notes upon conversion thereof, as the case may be, with such reduction and/or offset subject to a cap. If the initial purchasers exercise their option to purchase additional notes, MP Materials expects to enter into additional capped call transactions with the capped call counterparties.