SunPower announces closing of $220 million aggregate principal amount of its 4.5pc senior cash convertible debentures

SAN JOSE, USA: SunPower Corp. announced that it has closed an offering of $220 million aggregate principal amount of its 4.5% senior cash convertible debentures due 2015.

In connection with this offering, SunPower has granted the initial purchasers an option to purchase up to an additional $30 million aggregate principal amount of such debentures to cover overallotments for thirteen days after this closing.

SunPower intends to use the proceeds from the offering to replenish the cash reserves used in its acquisition of SunRay Renewable Energy, for working capital, capital expenditures and general corporate purposes, to pay the cost of the cash convertible debenture hedge and warrant transactions described below and, potentially, for the repayment of indebtedness.

The debentures will pay interest semi-annually on March 15 and September 15 beginning on September 15, 2010, at a rate of 4.5 percent per annum, and will mature on March 15, 2015. The debentures will be convertible only into cash, and not into shares of SunPower's common stock (or any other securities).

Prior to December 15, 2014, the debentures will be convertible only upon specified events and, thereafter, they will be convertible at any time, based on an initial conversion price of $22.53 per share of class A common stock (which is equivalent to a conversion rate of approximately 44.3853 shares of SunPower's class A common stock per $1,000 principal amount of debentures, representing a conversion premium of approximately 25 percent over the closing sale price of $18.02 per share of SunPower's class A common stock on the NASDAQ Global Select Market on March 25, 2010).

The debentures will not be convertible upon the satisfaction of customary market price trigger conditions until the first quarter of 2011. The conversion price and the conversion rate will be subject to adjustment in certain events, such as distributions of dividends or stock splits. Upon conversion, SunPower will deliver an amount of cash calculated by reference to the price of SunPower's class A common stock over the applicable observation period.

SunPower may not redeem the debentures prior to maturity. In connection with the sale of the debentures, SunPower entered into convertible debenture hedge and warrant transactions intended to reduce its potential exposure to cash payments upon conversion of the debentures.

The debentures were offered in a private placement only to qualified institutional buyers, as defined in Rule 144A under the Securities Act of 1933. The debentures have not been registered under the Act or any other state securities laws and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Act and applicable state securities law.