Lucid Group (LCID) Prices $1B Convertible Senior Notes Offering

Lucid Group, Inc. (Nasdaq: LCID) today announced the pricing of its offering of $1,000,000,000 aggregate principal amount of 5.00% convertible senior notes due 2030 in a private offering to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended. The issuance and sale of the notes are scheduled to settle on or about April 8, 2025, subject to the satisfaction of customary closing conditions. Lucid also granted the initial purchasers of the notes an option, for settlement within a period of 13 days from, and including, the date the notes are first issued, to purchase up to an additional $100,000,000 principal amount of notes.

The Notes

The notes will be senior, unsecured obligations of Lucid and will accrue interest at a rate of 5.00% per annum, payable semi-annually in arrears on April 1 and October 1 of each year, beginning on October 1, 2025. The notes will mature on April 1, 2030, unless earlier repurchased, redeemed or converted. Before January 1, 2030, noteholders will have the right to convert their notes only upon the occurrence of certain events and during specified periods. From and after January 1, 2030, noteholders may convert their notes at any time at their election until the close of business on the second scheduled trading day immediately before the maturity date. Lucid will settle conversions of notes by paying or delivering, as applicable, cash, shares of its Class A common stock, or a combination thereof, at Lucid's election. The initial conversion rate is 333.3333 shares of common stock per $1,000 principal amount of notes, which represents an initial conversion price of approximately $3.00 per share of common stock. The initial conversion price represents a premium of approximately 25.0% over the last reported sale price on The Nasdaq Global Select Market of $2.40 per share of Lucid's common stock on April 2, 2025. The conversion rate and conversion price will be subject to adjustment upon the occurrence of certain events. If a "make-whole fundamental change" (as defined in the indenture for the notes) occurs, Lucid will, in certain circumstances, increase the conversion rate for a specified time for holders who convert their notes in connection with that make-whole fundamental change.

The notes will be redeemable, in whole or in part (subject to certain limitations), for cash at Lucid's option at any time, and from time to time, on or after April 6, 2028 and on or before the 31st scheduled trading day immediately before the maturity date, but only if the last reported sale price per share of Lucid's common stock exceeds 130% of the conversion price for a specified period of time and certain liquidity conditions are satisfied. The redemption price will be equal to the principal amount of the notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date. If Lucid calls any or all notes for redemption, holders of notes called for redemption may convert their notes during the related redemption conversion period, and any such conversion will also constitute a "make-whole fundamental change" with respect to the notes so converted.

If a "fundamental change" (as defined in the indenture for the notes) occurs, then, subject to limited exceptions, holders may require Lucid to repurchase their notes for cash. The repurchase price will be equal to the principal amount of the notes to be repurchased, plus accrued and unpaid interest, if any, to, but excluding, the applicable repurchase date.

Lucid estimates that the net proceeds from the offering will be approximately $983.6 million (or approximately $1,082.2 million if the initial purchasers fully exercise their option to purchase additional notes), after deducting the initial purchasers' discounts and commissions and estimated offering expenses. Together with cash on hand, Lucid intends to use approximately $935.6 million of the net proceeds from the offering to fund repurchases of approximately $1,052.5 million aggregate principal amount of its outstanding 1.25% Convertible Senior Notes due 2026 and $107.5 million of the net proceeds to pay the cost of the capped call transactions described below.

Capped Call Transactions

In connection with the pricing of the notes, Lucid has entered into privately negotiated capped call transactions with certain of the initial purchasers of the notes or their respective affiliates and certain other financial institutions. The capped call transactions cover, subject to anti-dilution adjustments substantially similar to those applicable to the notes, the number of shares of Lucid's common stock that initially underlie the notes. The cap price of the capped call transactions is initially $4.80 per share of Lucid's common stock, representing a premium of 100.0% above the last reported sale price of $2.40 per share of Lucid's common stock on The Nasdaq Global Select Market on April 2, 2025, and is subject to customary anti-dilution adjustments under the terms of the capped call transactions. The capped call transactions are expected generally to reduce potential dilution to Lucid's common stock upon conversion of the notes and/or offset any cash payments that Lucid could be required to make in excess of the principal amount of any converted notes upon conversion thereof, as the case may be, with such reduction and/or offset subject to a cap. If the initial purchasers exercise their option to purchase additional notes, Lucid expects to enter into additional capped call transactions with the capped call counterparties.

Repurchases of Outstanding 2026 Notes

Concurrently with the pricing of the notes, Lucid entered into one or more separate and individually negotiated transactions with certain holders of the 2026 notes to repurchase for cash a portion of the 2026 notes on terms negotiated with each such holder.

Ayar Prepaid Forward Transaction

In connection with the pricing of the notes, Ayar Third Investment Company ("Ayar"), a wholly-owned subsidiary of the Public Investment Fund of Saudi Arabia, entered into a privately negotiated prepaid forward transaction with a forward counterparty that is an affiliate of one of the initial purchasers, pursuant to which Ayar will purchase approximately $430.0 million of Lucid's common stock (based on the last reported sale price on The Nasdaq Global Select Market of $2.40 per share of Lucid's common stock on April 2, 2025) with delivery expected to occur on or about the maturity date for the notes, subject to the ability of the forward counterparty to elect to settle all or a portion of the prepaid forward transaction early. Subject to the conditions set forth in the agreement governing the prepaid forward transaction, the prepaid forward transaction will be settled physically, subject to Ayar's option to elect cash settlement of the prepaid forward transaction. Lucid will not be a party to the prepaid forward transaction.

The prepaid forward transaction is generally intended to facilitate privately negotiated derivative transactions, including swaps, between the forward counterparty or its affiliates and investors in the notes relating to Lucid's common stock by which investors in the notes will hedge their investments in the notes. Ayar's entry into the prepaid forward transaction with the forward counterparty and the entry by the forward counterparty into derivative transactions in respect of Lucid's common stock with the investors of the notes could have the effect of increasing (or reducing the size of any decrease in) the market price of Lucid's common stock concurrently with, or shortly after, the pricing of the notes and effectively raising the initial conversion price of the notes.

Additional information about the transactions described in this press release can be found in the Current Report on Form 8-K that Lucid intends to file with the Securities and Exchange Commission on or about April 8, 2025.

The offer and sale of the notes and any shares of Lucid's common stock issuable upon conversion of the notes have not been, and will not be, registered under the Securities Act or any other securities laws, and the notes and any such shares cannot be offered or sold except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and any other applicable securities laws. This press release does not constitute an offer to sell, or the solicitation of an offer to buy, the notes or any shares of Lucid's common stock issuable upon conversion of the notes, nor will there be any sale of the notes or any such shares, in any state or other jurisdiction in which such offer, sale or solicitation would be unlawful.

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