Core Scientific announces proposed convertible senior notes offering

Core Scientific (CORZ) announced its intention to offer, subject to market and other conditions, $500 million aggregate principal amount of convertible senior notes due 2031 in a private offering to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended. Core Scientific also expects to grant 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 $75 million principal amount of notes. The notes will be senior, unsecured obligations of Core Scientific, will accrue interest payable semi-annually in arrears and will mature on June 15, 2031 unless earlier converted, redeemed or repurchased. Noteholders will have the right to convert their notes in certain circumstances and during specified periods. Core Scientific will settle conversions by paying or delivering, as applicable, cash, shares of its common stock or a combination of cash and shares of its common stock, at Core Scientific’s election. The notes will be redeemable, in whole or in part, for cash at Core Scientific’s option at any time, and from time to time, on or after June 22, 2028 and on or before the 20th scheduled trading day immediately before the maturity date, but only if the last reported sale price per share of Core Scientific’s common stock exceeds 130% of the conversion price for a specified period of time and certain other conditions are 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. The notes will be subject to repurchase by Core Scientific for cash at the noteholders’ option on December 15, 2027. In addition, if certain corporate events that constitute a “fundamental change” occur, then, subject to a limited exception, noteholders may require Core Scientific to repurchase their notes for cash. The repurchase price will be equal to the principal amount of the notes to be repurchased, plus accrued and unpaid interest, if any, to, but excluding, the applicable repurchase date or fundamental change repurchase date. The interest rate, initial conversion rate and other terms of the notes will be determined at the pricing of the offering. Core Scientific intends to use the net proceeds from the offering for general corporate purposes, including working capital, operating expenses, capital expenditures, acquisitions of complementary businesses, or repurchases of its securities.