Open report — full analysis, no account required.
Sign up to generate reports and read filings that aren't on the open list.
Get notified when BTU files again. Create a free account and we'll email you the moment its next filing is analyzed.
Get filing alertsPeabody issues $250M convertible notes at 0.50%, refinances higher-cost 2028 debt
Filed June 2, 2026 · Period ending May 28, 2026 · ~2 min read
Key Changes
-
high
Peabody completed a $250M private offering of convertible notes due 2031 at 0.50% interest, convertible at $38.32/share (32.5% premium to May 28 stock price of $28.92). Notes mature June 1, 2031 with semi-annual interest payments.
Item 1.01 verify on EDGAR → -
high
Company will use $243.3M net proceeds plus cash to repurchase $241.2M principal of existing 3.25% 2028 notes for $388.8M total, refinancing at lower rates while extending maturity by 3 years. Remaining $16.7M funds anti-dilution hedges.
Item 1.01 verify on EDGAR → -
medium
Peabody entered capped call transactions costing $16.7M to reduce dilution from conversions before May 2030, with cap price at $50.61/share (75% premium). This protects existing shareholders if stock rises but limits hedge benefit above cap.
Item 1.01 verify on EDGAR → -
medium
Notes cannot be redeemed before June 2029 except cleanup redemption. After June 2029, company can redeem at par if stock exceeds 130% of conversion price ($49.82) for 20 of 30 trading days and notes are freely tradable.
Item 1.01 verify on EDGAR → -
low
Notes and underlying shares sold in private placement to institutional buyers under Rule 144A exemption, not registered with SEC. Transfer restrictions apply, limiting liquidity for holders.
Item 3.02 verify on EDGAR →
Summary
Peabody Energy executed a strategic debt refinancing, issuing $250 million in new convertible notes at 0.50% interest to replace existing 2028 notes carrying a 3.25% rate. The transaction reduces annual interest expense by approximately $6.6 million while extending debt maturity from 2028 to 2031, improving the company's near-term financial flexibility.
The new notes convert at $38.32 per share, a 32.5% premium to the current stock price, meaning conversion would only occur if shares appreciate significantly. Retail investors should note that Peabody is paying $388.8 million in cash to retire $241.2 million in principal of the old notes—a 61% premium reflecting the higher interest rate and conversion value of the 2028 notes.
The company spent an additional $16.7 million on capped call hedges to limit dilution, demonstrating management's focus on protecting existing shareholders. However, the hedges cap out at $50.61 per share, so dilution protection disappears if the stock rises above that level. Watch Peabody's stock price relative to the $38.32 conversion threshold over the next year. If shares approach that level, conversion activity could begin, potentially adding shares to the float. Also monitor whether the company can maintain its improved debt profile without needing additional financing before 2031.
Section-by-Section Diff
Event · Item 1.01 — Entry into a Material Definitive Agreement
Item 1.01 — Entry into a Material Definitive Agreement filed; see Key Changes for terms.
Added in current filing · verify on EDGAR →
The initial conversion rate for the Notes will be 26.0970 shares of the Company’s common stock per $1,000 principal amount of Notes, which represents an initial conversion price of approximately $38.32 per share of the Company’s common stock. The initial conversion price represents a premium of approximately 32.5% over the U.S. composite volume weighted average price of Peabody’s common stock from 9:30 a.m. through 4:00 p.m. Eastern Daylight Time on May 28, 2026, which was $28.9197 per share.
Noteholders can convert at 26.0970 shares per $1,000 principal, equivalent to a $38.32 conversion price. This is 32.5% above the $28.9197 stock price on the pricing date. Conversion is restricted to specific circumstances including when stock price exceeds 130% of conversion price for 20 of 30 trading days, or anytime after December 1, 2030.
Added in current filing · verify on EDGAR →
On May 28, 2026, in connection with the offering of the Notes, and on May 29, 2026, in connection with the initial purchasers’ exercise of the Notes Option, the Company entered into privately negotiated capped call transactions (the “Capped Call Transactions”) with certain of the initial purchasers or their affiliates and certain other financial institutions (the “Option Counterparties”) pursuant to capped call confirmations in substantially the form filed as Exhibit 10.1 to this Current Report on Form 8-K. The Capped Call Transactions are expected generally to reduce the potential dilution to the Company’s common stock upon any conversion of the Notes prior to May 30, 2030, and/or offset any potential cash payments the Company is required to make in excess of the principal amount of such converted Notes, as the case may be, with such reduction and/or offset subject to a cap based on the cap price. The cap price of the Capped Call Transactions will initially be $50.6095 per share, which represents a premium of approximately 75.0% over the U.S. composite volume weighted average price of the Company’s common stock from 9:30 a.m. through 4:00 p.m. Eastern Daylight Time on May 28, 2026 (which was $28.9197 per share)
Peabody entered into capped call transactions to reduce potential dilution from note conversions before May 30, 2030. The cap price is $50.6095 per share, representing a 75% premium over the May 28, 2026 stock price of $28.9197. These transactions cost approximately $16.7 million and expire over trading days beginning April 17, 2030.
Event · Item 2.03 — Creation of a Direct Financial Obligation
Peabody Energy created a direct financial obligation or off-balance sheet arrangement, with details cross-referenced to Item 1.01.
Added in current filing · verify on EDGAR →
Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
Peabody Energy disclosed the creation of a direct financial obligation or an off-balance sheet arrangement under Item 2.03. The filing cross-references Item 1.01 for full details, but Item 1.01 content is not provided in this excerpt. This typically indicates new debt, credit facility, lease obligation, or similar financial commitment that creates a liability or contingent obligation for the company.
Event · Item 3.02 — Unregistered Sales of Equity Securities
Item 3.02 — Unregistered Sales of Equity Securities filed; see Key Changes for terms.
Added in current filing · verify on EDGAR →
The Company offered and sold the Notes to the initial purchasers in reliance on the exemption from registration provided by Section 4(a) (2) of the Securities Act of 1933, as amended (the “Securities Act”), and for initial resale by the initial purchasers to persons reasonably believed to be qualified institutional buyers pursuant to the exemption from registration provided by Rule 144A under the Securities Act.
Peabody Energy completed a private placement of convertible notes to institutional buyers without registering the securities with the SEC. The notes were sold under Section 4(a)(2) exemption and can be resold to qualified institutional buyers under Rule 144A. The notes are convertible into common stock, though neither the notes nor the underlying shares have been registered.
Added in current filing · verify on EDGAR →
Neither the Notes nor the shares of the Company’s common stock issuable upon conversion of the Notes, if any, have been registered under the Securities Act and these securities may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.
The convertible notes and any common stock issued upon conversion are unregistered securities with transfer restrictions. They cannot be freely traded in the United States without either SEC registration or meeting specific exemption requirements, which limits liquidity for holders.
Event · Item 9.01 — Financial Statements and Exhibits
Item 9.01 — Financial Statements and Exhibits filed; see Key Changes for terms.
Added in current filing · verify on EDGAR →
Indenture, dated as of June 2, 2026, between Peabody Energy Corporation and Wilmington Trust, National Association, as trustee.
Peabody entered into an indenture on June 2, 2026 with Wilmington Trust as trustee, governing the issuance of convertible senior notes. This establishes the legal framework for the new debt instrument and identifies the trustee responsible for bondholder interests.
Added in current filing · verify on EDGAR →
Form of 0.50% Convertible Senior Notes due 2031 (included in Exhibit 4.1).
The company issued convertible senior notes with a 0.50% coupon rate maturing in 2031. These notes can be converted into Peabody common stock under specified conditions, providing investors with equity upside potential while carrying a low interest rate that reduces the company's cash interest expense.
Added in current filing · verify on EDGAR →
Form of Capped Call Confirmation
Peabody entered into capped call transactions, which are derivative instruments typically used to reduce potential dilution from convertible note conversions by effectively raising the conversion price. This protects existing shareholders from dilution if the stock price rises, though the cap limits the company's hedge benefit above a certain price level.
Thanks — your feedback helps us improve report quality.
Figures/quotes linked to EDGAR · Narrative written by AI · Jun 2, 2026 · How we verify