Ormat Technologies Announces \$750 Million Convertible Senior Notes Offering and Strategic Repurchases

Key Highlights from the Announcement

• Ormat Technologies, Inc. (NYSE: ORA) has announced a proposed private offering of \$600 million Series A Convertible Senior Notes and \$150 million Series B Convertible Senior Notes, both due in 2031.
• The company may grant initial purchasers an option to buy up to an additional \$90 million in Series A Notes and \$22.5 million in Series B Notes within 13 days of issuance, potentially increasing the total offering to \$862.5 million.
• The Notes will be offered exclusively to qualified institutional buyers under Rule 144A of the Securities Act of 1933.

Detailed Terms of the Notes

• The Notes are unsecured senior obligations and will mature on March 15, 2031, unless converted, redeemed, or repurchased earlier.
• Interest payments will be made semiannually on March 15 and September 15 each year, starting September 15, 2026.
• Conversion Feature:
  • Convertible before November 15, 2030, only under certain circumstances and during specific periods.
  • After November 15, 2030, convertible at any time up to two days before maturity.
  • Upon conversion, Ormat may settle the principal in cash and any excess in cash, shares, or a combination at its discretion.
• Redemption Terms:
  • Notes are not redeemable by Ormat prior to March 20, 2029.
  • After March 20, 2029, and up to 61 days before maturity, Ormat may redeem the Notes if its stock price is at least 130% of the conversion price for at least 20 out of 30 consecutive trading days, at 100% of principal plus accrued interest.
• Series B Notes Special Feature:
  • Holders may require Ormat to repurchase their Series B Notes at par (plus accrued interest) on March 15, 2027.
• The specific interest rates, conversion rates, and final principal amounts will be determined at pricing, based on market conditions and negotiations with purchasers.

Strategic Use of Proceeds & Shareholder Impact

• A portion of the proceeds and \$25 million cash on hand will be used to repurchase part of Ormat’s existing 2.50% convertible senior notes due 2027 (“2027 Notes”) via privately negotiated transactions.
• Up to \$25 million of the proceeds may be used to buy back Ormat common shares in privately negotiated deals at the closing price on the pricing date, helping to offset the dilutive impact of the 2027 Notes.
• The remainder will be used for general corporate purposes.
• Potential Share Price Impact:
  • Share repurchases could increase the stock price or at least reduce any downward pressure, affecting the conversion dynamics of the new Notes.
  • The repurchase of 2027 Notes and related hedging activity by holders may lead to increased buying of Ormat shares, potentially raising the effective conversion price of the new Notes.
• Ormat will allow existing capped call transactions (entered with the 2027 Notes) to remain in place.
• Neither the Notes nor shares issuable upon conversion or in connection with repurchases are registered under the Securities Act and may only be offered or sold pursuant to exemption.

About Ormat Technologies

With over five decades of experience, Ormat Technologies is a leading, vertically integrated geothermal company, actively expanding into the energy storage sector. Its business includes the ownership, operation, design, manufacturing, and sale of geothermal and recovered energy generation (REG) power plants, primarily using the Ormat Energy Converter.

• Ormat’s engineered and constructed power plants (owned or installed for third parties) have a total gross capacity of approximately 3,600 MW globally.
• The current generation portfolio is 1,835 MW, with 1,340 MW from geothermal and solar across the U.S., Kenya, Guatemala, Indonesia, Honduras, and Guadeloupe, and 495 MW from energy storage, primarily in the U.S.

Forward-Looking Statements & Risks

This announcement contains forward-looking statements regarding the proposed offering, repurchase plans, share buybacks, and corporate strategies. Actual results may differ materially due to regulatory changes, market conditions, geopolitical factors, commodity prices, interest rates, supply chain disruptions, and other risks outlined in Ormat’s most recent SEC filings.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Investors should review official filings and consult financial advisors before making investment decisions. The forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those projected.

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