Rocket Lab USA, Inc. (“Rocket Lab”, “we”, “us” or “our”)
(Nasdaq: RKLB), a global leader in launch services and space
systems, announced today the pricing of its previously announced
private offering of $300.0 million aggregate principal amount of
4.250% convertible senior notes due 2029 (the “notes”) to persons
reasonably believed to be qualified institutional buyers pursuant
to Rule 144A under the Securities Act of 1933, as amended (the
“Securities Act”). The offering was upsized from the previously
announced offering size of $275.0 million aggregate principal
amount of notes. In connection with this offering, Rocket Lab
granted the initial purchasers of the notes an option to purchase,
for settlement within a period of 13 days from, and including the
date the notes are first issued, up to an additional $55.0 million
aggregate principal amount of the notes. The offering of the notes
is expected to close on February 6, 2024, subject to customary
closing conditions.
The notes will be senior, unsecured obligations of Rocket Lab
and will accrue interest at a rate of 4.250% per annum, payable
semi-annually in arrears on February 1 and August 1 of each year,
beginning on August 1, 2024. The notes will mature on February 1,
2029, unless earlier converted, redeemed or repurchased. Before
November 1, 2028, noteholders will have the right to convert their
notes in certain circumstances and during specified periods. From
and after November 1, 2028, noteholders may convert their notes at
any time at their election until the close of business on the
second scheduled trading day immediately before the maturity date.
Rocket Lab will settle conversions by paying or delivering, as
applicable, cash, shares of its common stock, par value $0.0001 per
share (“common stock”), or a combination of cash and shares of its
common stock, at Rocket Lab’s election. The initial conversion rate
is 195.1029 shares of common stock per $1,000 principal amount of
the notes, which represents an initial conversion price of
approximately $5.13 per share of common stock. The initial
conversion price represents a premium of approximately 27.5% above
the last reported sale price of the common stock on The Nasdaq
Capital Market on February 1, 2024, which was $4.02 per share. The
conversion rate and conversion price will be subject to adjustment
upon the occurrence of certain events.
The notes will be redeemable, in whole or in part (subject to
certain limitations), for cash at Rocket Lab’s option at any time,
and from time to time, on or after February 1, 2027 and on or
before the 40th scheduled trading day immediately before the
maturity date, but only if the last reported sale price per share
of the common stock exceeds 130% of the conversion price for a
specified period of time and certain liquidity conditions have been
satisfied. 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.
Rocket Lab estimates that the net proceeds from the offering of
the notes will be approximately $290.2 million (or approximately
$343.5 million if the initial purchasers exercise in full their
option to purchase additional notes), after deducting the initial
purchasers’ discounts and commissions and estimated offering
expenses payable by Rocket Lab. Rocket Lab intends to use
approximately $36.5 million of the net proceeds from the offering
to pay the cost of entering into the capped call transactions
described below. Additionally, Rocket Lab intends to use
approximately $40 million of the net proceeds from the offering to
repay a portion of its borrowings under its equipment financing
agreement, including accrued and unpaid interest on such
borrowings. Rocket Lab intends to use the remainder of the net
proceeds for working capital or other general corporate purposes,
which may include potential acquisitions and strategic
transactions. If the initial purchasers exercise their option to
purchase additional notes, Rocket Lab expects to use a portion of
the net proceeds from the sale of the additional notes to enter
into additional capped call transactions and the remainder of such
net proceeds for working capital or other general corporate
purposes, which may include potential acquisitions and strategic
transactions. From time to time, Rocket Lab evaluates potential
strategic transactions and acquisitions of businesses, technologies
or products.
Contemporaneously with the pricing of the notes, Rocket Lab
entered into privately negotiated capped call transactions (the
“capped call transactions”) with certain financial institutions
(the “option counterparties”). The capped call transactions will
cover, subject to customary adjustments, the number of shares of
common stock that will initially underlie the notes. The capped
call transactions are expected generally to reduce or offset
potential dilution to the common stock upon any conversion of the
notes and/or at Rocket Lab’s election (subject to certain
conditions) offset any potential cash payments we are required to
make in excess of the principal amount of converted notes, as the
case may be, with such reduction and/or offset subject to a cap.
The cap price of the capped call transactions will initially be
$8.04 per share of common stock, which represents a premium of 100%
over the last reported sale price of the common stock on The Nasdaq
Capital Market on February 1, 2024. If the initial purchasers
exercise their option to purchase additional notes, Rocket Lab
expects to enter into additional capped call transactions with the
option counterparties.
Rocket Lab has been advised that, in connection with
establishing their initial hedges of the capped call transactions,
the option counterparties or their respective affiliates expect to
purchase shares of 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. This
activity could increase (or reduce the size of any decrease in) the
market price of the common stock or the notes at that time.
In addition, the option counterparties and/or their respective
affiliates may modify their hedge positions by entering into or
unwinding various derivatives with respect to the common stock
and/or purchasing or selling the common stock or other securities
of Rocket Lab in secondary market transactions from time to time
prior to the maturity of the notes (and are likely to do so on each
exercise date of the capped call transactions, which are expected
to occur during the 40 trading day period beginning on the 41st
scheduled trading day prior to the maturity date of the notes, or
following Rocket Lab’s election to terminate any portion of the
capped call transactions in connection with any repurchase,
redemption or early conversion of the notes). This activity could
cause or avoid an increase or a decrease in the market price of the
common stock or the notes, which could affect a noteholder’s
ability to convert its notes and, to the extent the activity occurs
following conversion or during any observation period related to a
conversion of notes, it could affect the number of shares of common
stock and/or value of the consideration that a noteholder will
receive upon conversion of its notes.
The notes were offered only to persons reasonably believed to be
qualified institutional buyers pursuant to Rule 144A under the
Securities Act. The offer and sale of the notes and any shares of
common stock issuable upon conversion of the notes have not been,
and will not be, registered under the Securities Act or any other
securities laws, and the notes and any such shares cannot be
offered or sold absent registration or except pursuant to an
applicable exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act and any other
applicable securities laws. This press release does not constitute
an offer to sell, or the solicitation of an offer to buy, the notes
or any shares of common stock issuable upon conversion of the
notes, nor will there be any sale of the notes or any such shares,
in any state or other jurisdiction in which such offer, sale or
solicitation would be unlawful.
About Rocket Lab
Rocket Lab is a global leader in launch and space systems.
Rocket Lab’s Electron launch vehicle is the second most frequently
launched U.S. rocket annually and has delivered more than 176
satellites to orbit for commercial and Government partners,
including NASA, the U.S. Air Force, DARPA and the NRO. Rocket Lab
also delivers proven suborbital hypersonic launch capability with
its HASTE launch vehicle. Building on the deep heritage of
Electron, Rocket Lab is developing Neutron, an advanced 13-tonne
payload class, reusable launch vehicle tailored for constellation
deployment and interplanetary missions. Rocket Lab is also a
premier supplier of advanced satellites, flight-proven subsystems
and spacecraft components. At a component level, Rocket Lab
spacecraft technology spans space solar power, composite
structures, flight software, star trackers, reaction wheels,
separation systems, and more. Rocket Lab satellite technology and
components have been integrated into more than 1,700 satellite
missions globally.
Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995. We intend such forward-looking statements to be covered by
the safe harbor provisions for forward looking statements contained
in Section 27A of the Securities Act of 1933, as amended (the
“Securities Act”) and Section 21E of the Securities Exchange Act of
1934, as amended (the “Exchange Act”). All statements contained in
this press release other than statements of historical fact,
including, without limitation, express or implied statements
regarding our intentions with respect to the use of proceeds from
the offering of notes and the expected timing for the closing of
the notes offering and capped call transactions, are
forward-looking statements. The words “believe,” “may,” “will,”
“estimate,” “potential,” “continue,” “anticipate,” “intend,”
“expect,” “strategy,” “future,” “could,” “would,” “project,”
“plan,” “target,” and similar expressions are intended to identify
forward-looking statements, though not all forward-looking
statements use these words or expressions. These statements are
neither promises nor guarantees, but involve known and unknown
risks, uncertainties and other important factors that may cause our
actual results, performance or achievements to be materially
different from any future results, performance or achievements
expressed or implied by the forward-looking statements, including
but not limited to the factors, risks and uncertainties included in
our Annual Report on Form 10-K for the fiscal year ended December
31, 2022, as such factors may be updated from time to time in our
other filings with the Securities and Exchange Commission (the
“SEC”), accessible on the SEC’s website at www.sec.gov, which could
cause our actual results to differ materially from those indicated
by the forward-looking statements made in this press release. Any
such forward-looking statements represent management’s estimates as
of the date of this press release. While we may elect to update
such forward-looking statements at some point in the future, we
disclaim any obligation to do so, even if subsequent events cause
our views to change.
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version on businesswire.com: https://www.businesswire.com/news/home/20240201800129/en/
Rocket Lab Investor Relations Contact: Colin Canfield
investors@rocketlabusa.com
Rocket Lab Media Contact: Morgan Bailey
media@rocketlabusa.com
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