Stem Exchanges $350M In Aggregate Principal Amount Of 2028 And 2030 Convertible Senior Notes And Raises $10M Of Cash For $155M In New First Lien Notes Due 2030

Author: Benzinga Newsdesk | June 30, 2025 08:35am

Reduces outstanding debt by nearly $200 million and extends maturity profile

Significantly strengthens balance sheet, enhances ability to execute software-focused strategy

Stem, Inc. (NYSE:STEM) (the "Company"), a global leader in AI-enabled clean energy software and services, today announced that it completed a privately negotiated exchange (the "Exchange Agreement") with certain holders of the Company's outstanding 0.500% convertible senior notes due 2028 and 4.250% convertible senior notes due 2030 (the "Existing Notes").The transaction resulted in a reduction in outstanding debt of approximately $195 million.

Transaction Details

Under the terms of the Exchange Agreement, the Company will:

• Acquire approximately $350 million of aggregate principal amount of the Existing Notes including approximately $229 million of its Convertible Notes due 2028 (77% of total principal amount outstanding) and approximately $121 million of its Convertible Notes 2030 Notes (51% of total principal amount outstanding);
• Issue $155 million aggregate principal amount of new first lien senior secured notes (the "New Notes") and warrants to purchase 439,919 shares of the Company's common stock at a strike price of $30.00 per share (post-split) until December 1, 2030; and
• Receive $10 million in cash.

The New Notes will:

• Be senior secured obligations of the Company and be guaranteed by certain of the Company's material subsidiaries;
• Accrue interest at a rate of 11.000% annually, payable in cash or, at the Company's option, in-kind at a rate of 12.000%, subject to a $160 million first lien cap; and
• Mature on December 1, 2030

As a result of the exchange transactions, the Company's balance sheet will reflect:

• Approximately $68 million of its existing Convertible Notes due December 2028;
• Approximately $119 million of its existing Convertible Notes due April 2030; and
• Approximately $155 million of its newly issued Senior Secured Notes due December 2030

Posted In: STEM