GRANITE CONSTRUCTION INC 8-K

What Happened

• On May 18, 2026 Granite Construction Inc. announced a private offering of $600.0 million aggregate principal amount of senior notes due 2034. The company intends to use the net proceeds, together with cash on hand and any cash received from unwinding capped call transactions tied to its outstanding 3.75% Convertible Senior Notes due 2028 (the “2028 Notes”), to redeem all outstanding 2028 Notes and settle any conversions.
• The filing states the estimated market value of the 2028 Notes is approximately $827.3 million (based on the NYSE closing price of Granite’s common stock of $138.55 on May 15, 2026). Granite expects most holders will elect conversion following its redemption notice and expects to cash‑settle conversions up to about $2,617.41 per $1,000 principal (which corresponds on an as‑converted basis to roughly $120.00 per share). The company also expects, for illustrative purposes, to receive approximately $160.0 million from unwinding the related 2028 capped call transactions, though the actual amount and timing are subject to market conditions and counterparty negotiations.

Key Details

• Offering: $600.0 million senior notes due 2034 (private offering, exempt from registration).
• Target use of proceeds: redeem all outstanding 3.75% Convertible Senior Notes due 2028 and settle conversions; remaining proceeds, if any, to repay revolver borrowings and for general corporate purposes.
• Estimated values: 2028 Notes market value ≈ $827.3 million; illustrative capped call unwind proceeds ≈ $160.0 million (based on May 15, 2026 stock price).
• Cash settlement: up to ~$2,617.41 per $1,000 principal of 2028 Notes (≈ $120.00 per share as‑converted); actual amounts depend on stock price, conversion elections and final unwind terms.

Why It Matters

• This financing and planned redemption could materially change Granite’s capital structure: replacing convertible debt with senior notes may reduce future dilution risk from conversion but will create additional senior debt and interest obligations.
• The company’s actual cash needs and share issuance outcome depend on stock price and how many holders convert versus accept cash; therefore the final impact on leverage and share count is still uncertain.
• Investors should note the offering is subject to market conditions and the capped call unwind amount is an estimate—not guaranteed—so follow‑on disclosures will be important for assessing actual debt levels, cash use and potential dilution.