Ultra Clean Holdings, Inc. 8-K

What Happened

• Ultra Clean Holdings, Inc. announced on March 3, 2026 that it issued $600,000,000 principal amount of 0.00% Convertible Senior Notes due March 15, 2031 under an indenture with U.S. Bank Trust Company, N.A. The offering included $75,000,000 of additional notes issued upon full exercise of the initial purchasers’ option. The company also entered into privately negotiated capped call transactions around the pricing (Feb 26–27, 2026) to limit dilution and offset certain cash conversion amounts.

Key Details

• Issue size: $600,000,000 principal (includes $75,000,000 from exercised option).
• Coupon and maturity: 0.00% interest; maturity March 15, 2031.
• Conversion terms: initial conversion rate 11.8001 shares per $1,000 principal (≈ $84.75 per share); conversions generally available after Dec 16, 2030 and on certain earlier events.
• Capped calls: entered with counterparties to reduce dilution; cap price $104.0725 (75% premium to the Feb 26, 2026 share price); cost ≈ $25.1 million.
• Credit ranking and rights: senior unsecured obligations, pari passu with other senior unsecured debt, effectively subordinated to secured debt and structurally subordinated to subsidiaries’ liabilities; redemption, repurchase-on-fundamental-change and Events of Default provisions apply.

Why It Matters

• The transaction raises $600M of financing without regular interest payments, providing liquidity but increasing the company’s senior unsecured obligations. If notes convert, shareholders could be diluted at the initial conversion price (~$84.75/share); the capped‑call hedges are intended to limit that dilution (subject to the cap) but cost the company about $25.1M. Redemption, repurchase-on-change‑of‑control and default provisions may affect the company’s future cash needs and capital structure. Investors should watch potential dilution, timing of convertibility (December 2020/2030 window and earlier triggering events), and any impact on leverage and cash flow from repurchase or redemption scenarios.