Trina Solar Prices Secondary Offering, Issues New Debt

At the same time Trina priced a $150 million in convertible senior notes due 2019 and granted the initial purchasers an option to purchase up to $22.5 million in additional aggregate principal. The two offerings are expected to close on June 11, and both must close or else neither does.

Trina was one of the Chinese solar makers slapped with a tariff earlier this week on solar modules exported to the United States. Trina’s tariff is set at 18.56%, while Suntech’s tariff was set at 35.21%. Other Chinese solar makers will pay a tariff of 26.89%.

Trina said it plans to use the proceeds from the ADS offering for general corporate purposes, which may include development of solar power projects and their general financing requirements, expansion of manufacturing facilities and working capital.

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The company described the notes offering this way:

[T]he Company entered into zero-strike call options (the “call options”) with one or more of the initial purchasers (or their affiliates) of the Notes Offering (the “option counterparties”). The call options are intended to facilitate the hedging of their investments by the investors in the Notes. The Company has been advised that, in connection with establishing their initial hedge of the call options, the option counterparties (or their affiliates) expect to enter into one or more derivative transactions with respect to the ADSs with purchasers of the Notes concurrently with or after the pricing of the Notes. This activity could increase (or reduce the size of any decrease in) the market price of the ADSs or the Notes at that time. In addition, the option counterparties (or their affiliates) may modify their hedge positions by entering into or unwinding one or more derivative transactions with respect to the ADSs and/or purchasing or selling ADSs or other securities of the Company in secondary market transactions at any time, including following the pricing of the Notes and shortly after the maturity of the Notes (and, the Company has been advised, are likely to unwind their derivative transactions and/or purchase or sell ADSs in connection with any conversion, repurchase or redemption of the Notes). These activities could also cause or avoid an increase or cause or avoid a decrease in the market price of the ADSs or the Notes.

Trina shares opened the week at $13.75 and have dropped more than 16% to $11.49 Friday. The shares opened at $11.77 Friday morning, so the secondary offering did not hurt the shares as much as might have been expected, likely due to the close linkage with the notes offering.

The stock’s 52-week range is $5.00 to $18.77.

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