#Canada #Renewable Energy #Convertible Notes #Canadian Solar #Kitchener

Canadian Solar’s $200 Million Convertible Notes Offering

On January 9, 2026, Canadian Solar Inc. (NASDAQ: CSIQ) revealed the pricing of its recent offering of $200 million convertible senior notes scheduled to mature in 2031. This announcement marks a significant financial maneuver for the company, aimed at bolstering its investments in manufacturing and enhancing its capabilities in solar energy and battery storage solutions.

The convertible notes were offered in a private placement specifically targeted at institutional buyers, aligning with Rule 144A of the Securities Act of 1933. The company has also provided an option for initial purchasers to acquire an additional $30 million worth of notes, should they choose to do so within 13 days of issuance. This strategic offering is expected to conclude around January 13, 2026, pending the completion of standard closing conditions.

With the net proceeds estimated at approximately $194.6 million—potentially rising to $223.9 million if the additional notes are fully subscribed—Canadian Solar plans to channel these funds into scaling up its U.S. manufacturing capabilities and fortifying its battery energy storage and solar power solutions portfolio. Additionally, the funds may support working capital and general operational needs.

The notes will function as senior unsecured obligations, incurring an annual interest rate of 3.25% payable semi-annually, commencing on July 15, 2026. Investors can choose to convert all or part of their notes at any time prior to the third business day preceding the maturity date. The initial conversion price stands at roughly $27.63 per share, representing a 42.5% premium compared to the last recorded share price of $19.39 on January 8, 2026. Investors will receive shares in the company equivalent to the conversion rate alongside a cash payment for fractional shares upon conversion.

From January 22, 2029, Canadian Solar may look to extinguish the notes for cash if its common share price has consistently been 130% of the conversion price on at least 20 trading days within a 30-day period. Furthermore, the company can execute the complete redemption of these notes under certain tax-related situations, where the redemption price will equate to 100% of the principal amount alongside any accrued interest up to the redemption date.

In the event of specified changes in fundamental terms, holders can require the company to repurchase their notes for cash—this repurchase price will also equal to the principal amount plus any outstanding interest.

It is important to note that the notes and shares deliverable upon conversion have not been registered under the Securities Act or equivalent laws in other jurisdictions, meaning they can't be offered for sale absent proper registration or exemption.

This financing initiative follows Canadian Solar’s long-standing commitment to lead in renewable energy solutions. As one of the globe's leading solar technology providers, the company has successfully shipped nearly 170 GW of solar modules over 24 years and boasts a significant backlog of battery storage solutions through its subsidiary e-STORAGE. Canadian Solar aims to continue its trajectory in sustainable energy by strategically enhancing its project development pipeline in solar and battery storage capacities.

In conclusion, Canadian Solar's deliberate focus on securing convertible notes reflects its broader strategy of amplifying investments in renewable energy, primarily through optimizing and expanding its manufacturing footprint in the U.S. Such steps not only align with current market trends towards sustainability but also enhance the company’s ability to meet future energy demands. Investors are keenly observing how these developments will unfold in the coming years, especially given the increasing global emphasis on clean energy initiatives.