Lithium Americas Announces $150M Convertible Debenture Financing (up to $175M)

What Happened
Lithium Americas Corp. announced on Aug. 6, 2026 (Purchase Agreement dated Aug. 5, 2026) that it agreed to sell subordinated convertible debentures to YA II PN, Ltd. for up to $175.0 million, with an initial issuance of $150.0 million. Proceeds are for general corporate purposes (including project and corporate overhead, capex, debt repayment and working capital). The transaction creates a new direct financial obligation and the securities were sold in a private placement to an accredited investor.

Key Details

• Size: Initially $150.0 million issued; up to $175.0 million available via delayed closings.
• Term & interest: 5‑year maturity; base interest 5% per annum; interest can step up to 7.5% and then 15% if specified triggers occur (e.g., stock price below floor, registration delays, or exchange cap exhaustion).
• Conversion mechanics: Conversion price = lower of (i) a fixed price (higher of 140% of NYSE close on day before issuance and $3.79), or (ii) 95% of the lowest daily VWAP during the 5 trading days before conversion; subject to a floor equal to 50% of the NYSE close on the day before issuance (can be reduced but not below 20%).
• Ownership limits: Investor conversions capped at 19.99% of outstanding common shares unless shareholder approval obtained; beneficial ownership conversion blocked above 4.99% (can be raised to 9.99% with 65 days’ notice).
• Repayment & restrictions: While certain Orion notes remain outstanding, cash repayments of Debentures limited to $35 million and only from new equity financing or JV distributions; cash interest on the Debentures prohibited unless Orion interest payments are made in cash. Optional redemption allowed after day 181 at principal + 10% premium + accrued interest (investor has 10 trading days to elect conversion before redemption).
• Registration rights & sale: Company agreed to file a resale registration for shares issuable on conversion within three business days after filing its Q2 2026 Form 10-Q. Debentures and underlying shares were issued in a private placement under Regulation D.

Why It Matters
This transaction provides Lithium Americas with near‑term liquidity (initial $150M) but creates a new subordinated debt obligation that could convert into equity and dilute existing shareholders. Conversion price mechanics, ownership caps and conversion floors limit some dilution but leave scope for share issuance if stock trading prices permit conversion. Operational flexibility is narrowed by repayment and interest restrictions linked to existing Orion notes and by covenants limiting certain transactions and additional indebtedness. Investors should watch for the registration statement filing, any delayed closings for the remaining $25M, and future events (stock price moves, registration delays, or exchange‑cap use) that could trigger interest rate increases or conversion/redemption activity.