Ramaco Resources plans $300 million convertible notes offering

Ramaco Resources, Inc. (NASDAQ: METC) announced plans to offer $300 million in convertible senior notes due 2031, subject to market and other conditions. The company also expects to grant underwriters an option to purchase up to an additional $45 million in notes to cover over-allotments within 13 days of issuance.

Goldman Sachs & Co. LLC and Morgan Stanley & Co. LLC will serve as book-running managers for the offering. The notes will be senior, unsecured obligations that accrue interest payable semi-annually on May 1 and November 1 each year, beginning May 1, 2026, and will mature November 1, 2031.

The notes will be convertible at holders' option under certain circumstances. Ramaco can settle conversions by paying cash, shares of Class A common stock, or a combination of both. The company may redeem the notes for cash starting November 6, 2028, if the stock price exceeds 130% of the conversion price for a specified period.

Ramaco intends to use a portion of net proceeds to fund capped call transactions and expects to use the remainder for developing its rare earth elements and critical minerals project, strategic growth opportunities, and general corporate purposes.

The company will enter into capped call transactions with underwriters or affiliates to reduce potential dilution from note conversions. These transactions will cover the number of Class A common stock shares initially underlying the notes, subject to a cap price.

Concurrently with the notes offering, Goldman Sachs and Morgan Stanley plan a separate public offering of borrowed Ramaco Class A common stock shares to facilitate hedging transactions by note purchasers. The completion of both offerings is contingent on each other, and Ramaco will not receive proceeds from the concurrent stock offering.

The information is based on a company press release statement.

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