Lucid stock falls after announcing $875 million convertible notes offering

Investing.com -- Lucid Group (NASDAQ:LCID) stock fell 3% in after-hours trading Tuesday following the company’s announcement of a proposed $875 million convertible senior notes offering.

The luxury electric vehicle maker plans to offer $875 million in convertible senior notes due 2031 in a private offering to qualified institutional buyers. Lucid also expects to grant initial purchasers an option to buy up to an additional $100 million in notes within a 13-day period from issuance.

According to the company’s press release, Lucid intends to use the proceeds to repurchase a portion of its outstanding 1.25% Convertible Senior Notes due 2026 and for general corporate purposes. The notes will be senior, unsecured obligations that mature on November 1, 2031, unless earlier repurchased, redeemed, or converted.

The Public Investment Fund of Saudi Arabia (PIF), through its subsidiary Ayar Third Investment Company, will provide support via a prepaid forward transaction. This arrangement is expected to facilitate privately negotiated derivative transactions between the forward counterparty and investors in the notes.

The interest rate, initial conversion rate, and other terms of the notes will be determined when the offering is priced. Noteholders will have limited rights to convert their notes under specific circumstances and during designated periods.

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