ITRON, INC. 8-K

What Happened

• Itron, Inc. announced it entered a purchase agreement (Feb 23–24, 2026) to sell $700.0 million of 0.00% convertible senior notes due 2032 to initial purchasers and granted a 13‑day shoe option that was exercised in full, bringing total notes issued to $805.0 million. The notes were issued under Rule 144A and an Indenture with U.S. Bank Trust Company dated Feb 26, 2026.
• The notes carry no regular interest (principal does not accrete), mature March 15, 2032, and have an initial conversion rate of 8.0793 shares per $1,000 principal (≈ $123.77 conversion price per share). Itron also entered into privately negotiated capped‑call transactions related to the offering, paying about $92.8 million to cover roughly 6.5 million shares.

Key Details

• Total offering: $805.0 million aggregate principal (Firm Notes $700.0M + Additional Notes $105.0M via shoe option exercised Feb 24, 2026).
• Conversion terms: 8.0793 shares per $1,000 note (≈ $123.77/share); conversion available in limited circumstances before Dec 15, 2031 and freely from Dec 15, 2031 until two trading days before maturity.
• Capped calls: Paid ≈ $92.8 million, covering ~6.5M shares, strike ≈ $123.77, initial cap price $190.42/share (subject to adjustments).
• Other material terms: Notes are senior unsecured (rank equally with other unsubordinated debt), effectively subordinated to secured debt and structurally subordinated to subsidiary obligations; company may redeem notes for cash in certain circumstances (Mar 20, 2030–Dec 15, 2031) and holders may require repurchase on a fundamental change at 100% of principal.

Why It Matters

• Capital structure and liquidity: The issuance raises immediate cash (~$805M) which the company can use for strategic purposes, debt management, or operations—affecting balance‑sheet leverage and liquidity.
• Potential shareholder impact: If notes convert, shareholders could face dilution; the capped‑call transactions reduce dilution up to the cap price but do not eliminate it if the stock rises above the cap. Investors should watch the company’s stock vs. the $123.77 conversion price and the $190.42 capped‑call cap.
• Future cash obligations: While the notes pay no regular interest, Itron may owe additional interest in limited circumstances and may need to make cash payments if conversions or repurchases occur; the notes also create a new senior unsecured obligation in the debt stack.