NYSE: GVA GRANITE CONSTRUCTION INC 8-K

Granite Construction closes $600M senior notes at 6.375% to redeem convertibles

Filed June 2, 2026 · Period ending June 2, 2026 · ~1 min read

Key Changes

high

Closed $600M senior notes offering at 6.375% due 2034; net proceeds of ~$590M will redeem all $273.7M outstanding convertible notes due 2028 and repay revolving credit facility borrowings.

Item 1.01 — Entry into a Material Definitive Agreement verify on EDGAR →
high

Convertible note redemption triggers ~$500M non-cash derivative liability charge due to 253% stock price appreciation since issuance; charge will be remeasured through settlement and excluded from non-GAAP metrics.

Item 7.01 — Regulation FD Disclosure verify on EDGAR →
medium

Conversion settlement structure pays cash up to $120/share with stock for excess value, limiting dilution; 2026 adjusted EBITDA margin guidance unchanged.

Item 7.01 — Regulation FD Disclosure verify on EDGAR →
medium

New notes callable after June 2029 at specified prices; before then, up to 40% redeemable with equity proceeds at 106.375% of par or any amount at par plus make-whole premium.

Item 1.01 — Entry into a Material Definitive Agreement verify on EDGAR →
medium

Indenture includes standard high-yield covenants restricting additional debt, restricted payments, liens, and asset sales; notes guaranteed by domestic subsidiaries.

Item 1.01 — Entry into a Material Definitive Agreement verify on EDGAR →

Summary

Granite Construction completed a $600 million senior notes offering at 6.375% due 2034, using the proceeds to redeem all outstanding convertible notes due 2028 and repay revolving credit facility borrowings. This refinancing replaces $273.7 million of convertible debt with straight senior debt at a higher coupon, eliminating conversion overhang and simplifying the capital structure.

The convertible note redemption triggers a significant accounting impact: the company's 253% stock price appreciation since the notes were issued requires bifurcation of the embedded conversion option as a derivative liability under ASC 815, estimated at approximately $500 million as of May 19, 2026.

This will appear as non-cash charges in GAAP earnings through settlement but will be excluded from adjusted EBITDA and adjusted net income. The company's 2026 adjusted EBITDA margin guidance remains unchanged, and the accounting treatment creates no incremental cash obligations beyond the planned conversion settlement amounts. The conversion settlement structure pays cash up to $120 per share with stock for any excess value, limiting shareholder dilution. The new notes are callable after June 2029 and include standard high-yield covenants. Retail holders should focus on the non-cash nature of the derivative charge and the unchanged operating guidance rather than the headline GAAP earnings impact.

Section-by-Section Diff

Event · Item 2.03 — Creation of a Direct Financial Obligation

~58 words

Item 2.03 also reports this as a direct financial obligation (body incorporates the primary Item by reference).

1 Added

Added Item 2.03 — direct financial obligation (cross-ref) medium

Added in current filing · verify on EDGAR →

Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant. The information set forth under Item 1.01 of this Current Report on Form 8-K with respect to the Notes Offering and the Indenture is incorporated herei

The 8-K includes a labeled Item 2.03 section. Its body incorporates the primary Item (typically 1.01) by reference rather than restating terms — do not treat that thinness as 'Item 2.03 absent.' The company is signaling creation of a direct financial obligation alongside the agreement disclosure; keep Item 2.03 visible in the report.

Event · Item 7.01 — Regulation FD Disclosure

~1,100 words

Item 7.01 — Regulation FD Disclosure filed; see Key Changes for terms.

2 Added

Added 2028 Notes redemption and conversion settlement high

Added in current filing · verify on EDGAR →

On May 19, 2026 (the “Call Notice Date”), the Company announced that it called the outstanding $273.7 million aggregate principal amount of its 2028 Notes for redemption on August 10, 2026, and elected to settle conversions on or after the Call Notice Date and through the close of business on August 6, 2026 by paying cash up to $2,617.40 per $1,000 principal amount of the 2028 Notes to be converted (which, on an as-converted basis, corresponds to approximately $120.00 per share of its common stock) and delivering shares of the Company’s common stock, par value $0.01 per share, in respect of the remainder, if any, of the conversion obligation in excess thereof (the “Conversion Election”).

Granite called its $273.7 million convertible notes due 2028 for redemption on August 10, 2026. The company will settle conversions by paying cash up to $2,617.40 per $1,000 principal amount (approximately $120 per share) and issuing stock for any excess conversion value. This structure is designed to limit shareholder dilution.

Added Non-GAAP exclusion and guidance impact medium

Added in current filing · verify on EDGAR →

The Company expects to exclude the impacts associated with the redemption and related conversion settlements of the 2028 Notes and any related tax effects from its non-GAAP financial measures, including adjusted EBITDA and adjusted net income attributable to Granite. This expected accounting treatment does not change the Company’s 2026 adjusted EBITDA margin guidance. Additionally, these expected accounting impacts do not represent incremental cash obligations beyond the cash settlement amounts already contemplated by the Conversion Election.

Granite will exclude the derivative liability charges and related tax effects from its non-GAAP metrics such as adjusted EBITDA and adjusted net income. The company's 2026 adjusted EBITDA margin guidance remains unchanged. The accounting charges are non-cash and do not create cash obligations beyond the amounts already planned for the conversion settlement.

Event · Item 1.01 — Entry into a Material Definitive Agreement

~1,100 words

Item 1.01 — Entry into a Material Definitive Agreement filed; see Key Changes for terms.

1 Added

Added Covenants and guarantees medium

Added in current filing · verify on EDGAR →

The Indenture contains customary terms and covenants, including limitations on the incurrence of additional indebtedness, the making of restricted payments, the creation of liens, the transfer or sale of assets, the creation of restrictions on the payment of dividends to the Company by the Guarantors, mergers or consolidations and affiliate transactions and provides that upon certain events of default occurring and continuing, either the Trustee or the holders of at least 30% in aggregate principal amount of the Notes then outstanding may declare the entire principal amount of the Notes, and the interest accrued on such Notes, to be immediately due and payable.

The indenture includes standard high-yield covenants restricting additional debt, restricted payments, liens, asset sales, and affiliate transactions. The notes are guaranteed by domestic subsidiaries that participate in the company's credit facility. Holders of 30% of outstanding principal can accelerate the notes upon an event of default.