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Get filing alertsGranite prices $600M senior notes at 6.375% to redeem 2028 convertible notes
Filed May 19, 2026 · Period ending May 18, 2026 · ~1 min read
Key Changes
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high
Priced $600M senior notes at 6.375% due 2034, expected to close June 2, 2026, guaranteed by domestic subsidiaries under existing credit facility
Exhibit 99.1 view on EDGAR → -
high
Will use proceeds plus cash and capped call payments to redeem all outstanding 3.75% convertible notes due 2028 (estimated market value $827.3M based on $138.55 stock price)
Exhibit 99.1 view on EDGAR → -
high
Expects most 2028 noteholders will convert upon redemption; may settle conversions partially in stock rather than all cash, reducing cash outlay
Exhibit 99.1 view on EDGAR → -
medium
Will unwind capped call transactions tied to 2028 notes and receive fair value payment from counterparties to help fund redemption
Exhibit 99.1 view on EDGAR →
Summary
Granite Construction is refinancing its capital structure by issuing $600 million in 6.375% senior notes due 2034 to retire its 3.75% convertible notes due 2028. While the new notes carry a higher coupon, the transaction eliminates the conversion overhang and associated dilution risk from the convertibles, whose estimated market value of $827.3 million reflects substantial in-the-money conversion value at the current $138.55 stock price. The company expects most 2028 noteholders will elect to convert rather than accept cash redemption, and Granite may settle these conversions partially in stock to preserve cash.
Combined with proceeds from unwinding the associated capped call hedges and any excess funds, remaining proceeds will repay revolving credit borrowings. The refinancing trades a lower-rate convertible for straight debt at a higher rate, but removes equity dilution uncertainty and extends the maturity profile by six years. The transaction closes June 2, 2026, subject to customary conditions.
Section-by-Section Diff
Event · Exhibit 99.1
Added in current filing · view on EDGAR →
Granite intends to use the net proceeds from the offering, together with cash on hand and any cash payments received from the financial institutions that are counterparties to the capped call transactions related to the Company’s outstanding 3.75% Convertible Senior Notes due 2028 (the “2028 Notes”), to redeem all of the outstanding 2028 Notes and settle any conversions in connection therewith following the offering and, if applicable, as discussed below, to repay borrowings under its revolving credit facility and for general corporate purposes.
Granite will use the proceeds from the new notes offering, along with cash on hand and payments from capped call transaction counterparties, to redeem all outstanding 3.75% Convertible Senior Notes due 2028. Any remaining proceeds will be used to repay revolving credit facility borrowings and for general corporate purposes.
Added in current filing · view on EDGAR →
In connection with any conversions or redemption of the 2028 Notes, Granite expects to unwind and terminate the capped call transactions it entered into in connection with the original issuance of the 2028 Notes. In such unwind and termination, Granite would receive an amount from the financial institutions that are counterparties to the capped call transactions equal to the fair value of such transactions, determined at the time of the unwind and termination.
Granite will unwind and terminate the capped call transactions associated with the 2028 convertible notes. The company will receive a cash payment from the counterparty financial institutions equal to the fair value of these transactions at the time of termination, which will help fund the redemption and conversion settlements.
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Figures/quotes linked to EDGAR · Narrative written by AI · Jul 14, 2026 · How we verify