0001437749-23-013308.txt : 20230509 0001437749-23-013308.hdr.sgml : 20230509 20230509161525 ACCESSION NUMBER: 0001437749-23-013308 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 18 CONFORMED PERIOD OF REPORT: 20230508 ITEM INFORMATION: Entry into a Material Definitive Agreement ITEM INFORMATION: Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant ITEM INFORMATION: Other Events ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20230509 DATE AS OF CHANGE: 20230509 FILER: COMPANY DATA: COMPANY CONFORMED NAME: GRANITE CONSTRUCTION INC CENTRAL INDEX KEY: 0000861459 STANDARD INDUSTRIAL CLASSIFICATION: HEAVY CONSTRUCTION OTHER THAN BUILDING CONST - CONTRACTORS [1600] IRS NUMBER: 770239383 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-12911 FILM NUMBER: 23902201 BUSINESS ADDRESS: STREET 1: 585 WEST BEACH ST CITY: WATSONVILLE STATE: CA ZIP: 95076 BUSINESS PHONE: 8317241011 MAIL ADDRESS: STREET 1: 585 WEST BEACH ST CITY: WATSONVILLE STATE: CA ZIP: 95076 8-K 1 gva20230508_8k.htm FORM 8-K gva20230508_8k.htm
false 0000861459 0000861459 2023-05-08 2023-05-08
 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
 

 
FORM 8-K 
 
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
 
Date of report (Date of earliest event reported): May 8, 2023
 
GRANITE CONSTRUCTION INCORPORATED
(Exact Name of Registrant as Specified in its Charter)
 
Delaware
 
1-12911
 
77-0239383
(State or Other Jurisdiction
of Incorporation)
 
(Commission
File Number)
 
(IRS Employer
Identification No.)
 
585 West Beach Street
Watsonville, California 95076
(Address of Principal Executive Offices) (Zip Code)
 
Registrant’s telephone number, including area code: (831) 724-1011 
 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
 
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
Securities registered pursuant to Section 12(b) of the Act:
 
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Common Stock, $0.01 par value
GVA
New York Stock Exchange
 
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
 
Emerging growth company
 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
 
 

 
Item 1.01. Entry into a Material Definitive Agreement.
 
Granite Construction Incorporated (the “Company”) entered into the Amendment No. 1 to Fourth Amended and Restated Credit Agreement, dated as of May 8, 2023, among the Company and certain subsidiaries of the Company, each as borrowers, Bank of America, N.A., as administrative agent, and the lenders party thereto (the “Amendment”). The Amendment amends the Fourth Amended and Restated Credit Agreement, dated as of June 2, 2022, by and among the Company, Granite Construction Company and GILC Incorporated, as borrowers, Bank of America, N.A., as administrative agent, collateral agent, swing line lender and L/C issuer, and the lenders and other parties thereto (the “Original Credit Agreement,” and as amended, modified, or supplemented, the “Credit Agreement”).
 
The Amendment amended the Original Credit Agreement to, among other things, permit the Company to exchange its 2.75% convertible senior notes due 2024 for cash and shares of its common stock and to clarify that (i) the issuance of the Notes (as defined below) is permitted under the terms of the Credit Agreement and (ii) that a Swap Contract (as defined in the Credit Agreement) does not include any Permitted Call Spread Transaction (as defined in the Credit Agreement).
 
Certain of the lenders under the Credit Agreement and their affiliates have engaged in, and may in the future engage in, other commercial dealings with the Company or its affiliates in the ordinary course of business, including in connection with the offering of the Notes and the related capped call transactions. They have received, or may in the future receive, customary fees and commissions for those transactions.
 
The foregoing description of the Amendment is qualified in its entirety by reference to the Amendment attached as Exhibit 10.1 to this Current Report on Form 8-K and incorporated herein by reference.
 
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 is incorporated herein by reference.
 
Item 8.01. Other Events.
 
On May 8, 2023, the Company issued a press release announcing its intention to offer $325 million aggregate principal amount of its convertible senior notes due 2028 (the “Notes”) in a private offering that is exempt from the registration requirements of the Securities Act of 1933, as amended. On May 9, 2023, the Company issued a press release announcing the pricing of the Notes. Copies of the press releases are attached as Exhibit 99.1 and Exhibit 99.2, respectively, to this Current Report on Form 8-K and are incorporated herein by reference.
 
Item 9.01. Financial Statements and Exhibits.
 
(d) Exhibits.
 
Exhibit
Number
 
Description
     
10.1
 
99.1
 
99.2
 
104
 
Cover Page Interactive Data File (formatted as Inline XBRL)
 
 

 
SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 
 
GRANITE CONSTRUCTION INCORPORATED
       
Date: May 9, 2023
By:
/s/ M. Craig Hall
M. Craig Hall
Senior Vice President, General Counsel and Secretary  
 
 
EX-10.1 2 ex_516429.htm EXHIBIT 10.1 ex_516429.htm

Exhibit 10.1

 

AMENDMENT NO. 1 TO FOURTH AMENDED AND RESTATED CREDIT AGREEMENT

 

This Amendment No.1 to Fourth Amended and Restated Credit Agreement (this “Amendment”), dated as of May 8, 2023, is made by and among GRANITE CONSTRUCTION INCORPORATED, a Delaware corporation (the “Company” and a “Borrower”), GRANITE CONSTRUCTION COMPANY, a California corporation (“GCC” and a “Borrower”), GILC INCORPORATED, a California corporation (“GILC” and a “Borrower”, and together with the Company and GCC, collectively the “Borrowers”), each of the Guarantors (as defined in the Credit Agreement (as defined below)) signatory hereto, BANK OF AMERICA, N.A., a national banking association organized and existing under the laws of the United States (“Bank of America”), in its capacity as administrative agent for the Lenders (as defined in the Credit Agreement) (in such capacity, the “Administrative Agent”), and each of the Lenders signatory hereto.

 

W I T N E S S E T H:

 

WHEREAS, each of the Borrowers, Bank of America, as Administrative Agent, and the Lenders from time to time party thereto have entered into that certain Fourth Amended and Restated Credit Agreement dated as of June 2, 2022 (the “Existing Credit Agreement,” and the Existing Credit Agreement as amended by this Amendment, the “Credit Agreement”); capitalized terms used in this Amendment not otherwise defined herein shall have the respective meanings given thereto in the Credit Agreement), pursuant to which the Lenders have made available to the Borrowers a revolving credit facility, including a letter of credit subfacility and a swing line loan subfacility;

 

WHEREAS, each of the Guarantors has entered into a Guaranty pursuant to which it has guaranteed certain or all of the obligations of the Borrowers under the Credit Agreement and the other Loan Documents;

 

WHEREAS, the Borrowers have requested that the Administrative Agent and the Lenders agree to amend the Existing Credit Agreement to, among other things, permit the Company to incur additional convertible indebtedness and exchange outstanding convertible indebtedness; and

 

WHEREAS, the Administrative Agent and the Lenders are willing to amend the Existing Credit Agreement as set forth below on the terms and conditions contained in this Amendment;

 

NOW, THEREFORE, in consideration of the premises and further valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:

 

1.    Amendments to Existing Credit Agreement. Subject to and in accordance with the terms and conditions set forth herein and in reliance upon the representations and warranties set forth herein:

 

(a)         The definition of “Sanctions” in Section 1.01 of the Existing Credit Agreement is hereby amended and restated as follows:

 

““Sanction(s)” means any sanction administered or enforced by the United States Government (including without limitation, OFAC), the United Nations Security Council, the European Union, His Majesty’s Treasury (“HMT”) or other relevant sanctions authorities in which the Company or any of its Subsidiaries does business.”

 

(b)         The definition of “Swap Contract” in Section 1.01 of the Existing Credit Agreement is hereby amended and restated as follows:

 

 

 

““Swap Contract” means (a) any and all rate swap transactions, basis swaps, credit derivative transactions, forward rate transactions, commodity swaps, commodity options, forward commodity contracts, equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions, interest rate options, forward foreign exchange transactions, cap transactions, floor transactions, collar transactions, currency swap transactions, cross-currency rate swap transactions, currency options, spot contracts, or any other similar transactions or any combination of any of the foregoing (including any options to enter into any of the foregoing), whether or not any such transaction is governed by or subject to any master agreement, and (b) any and all transactions of any kind, and the related confirmations, which are subject to the terms and conditions of, or governed by, any form of master agreement published by the International Swaps and Derivatives Association, Inc., any International Foreign Exchange Master Agreement, or any other master agreement (any such master agreement, together with any related schedules, a “Master Agreement”), including any such obligations or liabilities under any Master Agreement; provided that the term “Swap Contract” shall not include any Permitted Call Spread Transaction.”

 

(c)         The definition of “Term SOFR” in Section 1.01 of the Existing Credit Agreement is hereby amended and restated as follows:

 

““Term SOFR” means:

 

(a)    for any Interest Period with respect to a Term SOFR Loan, the rate per annum equal to the Term SOFR Screen Rate two U.S. Government Securities Business Days prior to the commencement of such Interest Period with a term equivalent to such Interest Period; provided that if the rate is not published prior to 11:00 a.m. on such determination date then Term SOFR means the Term SOFR Screen Rate on the first U.S. Government Securities Business Day immediately prior thereto, in each case, plus the SOFR Adjustment for such Interest Period; and

 

(b)    for any interest calculation with respect to a Base Rate Loan on any date, the rate per annum equal to the Term SOFR Screen Rate with a term of one month commencing that day; provided that if the rate is not published prior to 11:00 a.m. on such determination date then Term SOFR means the Term SOFR Screen Rate on the first U.S. Government Securities Business Day immediately prior thereto, in each case, plus the SOFR Adjustment for such term;

 

provided that if the Term SOFR determined in accordance with either of the foregoing clauses (a) or (b) of this definition would otherwise be less than zero, the Term SOFR shall be deemed zero for purposes of this Agreement.”

 

(d)         Section 7.03(n) of the Existing Credit Agreement is hereby amended by amending and restating such Section 7.03(n) in its entirety as follows:

 

“(n)         any Permitted Convertible Indebtedness; provided that any such Permitted Convertible Indebtedness with a stated maturity date occurring prior to the Maturity Date shall not exceed an aggregate principal amount of $250,000,000.”

 

2

 

(e)         Section 7.07(j) of the Existing Credit Agreement is hereby amended by amending and restating such Section 7.07(j) in its entirety as follows:

 

“(j)         the Company may make any payments of cash or deliveries in shares of Common Stock (or other securities or property following a merger event, reclassification or other change of the Common Stock) (and cash in lieu of fractional shares) with respect to any Permitted Convertible Indebtedness (including, without limitation, making payments of interest, principal or premium thereon; making payments and deliveries upon repurchase, redemption or exchange (whether in or for cash, securities, other property or any combination of the foregoing) thereof; and/or making payments and deliveries upon conversion or settlement thereof); and”

 

2.    Effectiveness; Conditions Precedent. This Amendment and the amendments provided in Section 1 above shall be effective as of the date first written above upon the satisfaction of the following conditions precedent:

 

(a)    the Administrative Agent shall have received counterparts of this Amendment, duly executed by each Borrower, the Administrative Agent, and the Required Lenders; and

 

(b)    all interest, fees and expenses incurred or payable in connection with the execution and delivery of this Amendment (including, without limitation, the reasonable fees and expenses of counsel to the Administrative Agent) that have been requested to be paid on or before the date hereof shall have been paid in full.

 

3.    Representations and Warranties. In order to induce the Administrative Agent and the Lenders to enter into this Amendment, the Borrowers represent and warrant to the Administrative Agent and the Lenders as follows:

 

(a)    After giving effect to the amendments to the Credit Agreement provided in Section 1 hereof, the representations and warranties made by the Borrowers in Article V of the Credit Agreement and in each of the other Loan Documents to which it is a party are, in each case, true and correct in all material respects on and as of the date hereof, except to the extent that such representations and warranties expressly relate to an earlier date, in which case they are true and correct as of such earlier date;

 

(b)    The Persons appearing as Guarantors on the signature pages to this Amendment constitute all Persons who are required to be Guarantors pursuant to the terms of the Credit Agreement and the other Loan Documents, including without limitation all Persons who became Subsidiaries or were otherwise required to become Guarantors after the Closing Date and prior to the date hereof, except as explicitly noted in Section 6.14(a) of the Credit Agreement, and each of such Persons has become and remains a party to a Guaranty as a Guarantor;

 

(c)    This Amendment has been duly authorized, executed and delivered by the Borrowers and the Guarantors and constitutes a legal, valid and binding obligation of such parties, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws generally affecting the rights of creditors, and subject to equitable principles of general application; and

 

(d)    After giving effect to this Amendment, no Default or Event of Default has occurred and is continuing; and no default or event of default under the Permitted Convertible Indebtedness exists, or would result from the effectiveness of this Amendment.

 

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4.    Consent of the Guarantors. Each of the Guarantors hereby consents, acknowledges and agrees to the amendments set forth herein and hereby confirms and ratifies in all respects the Guaranty to which such Guarantor is a party (including without limitation the continuation of such Guarantor’s payment and performance obligations thereunder upon and after the effectiveness of this Amendment and the amendments and consents contemplated hereby) and the enforceability of such Guaranty against such Guarantor in accordance with its terms.

 

5.    Entire Agreement. This Amendment, together with all the Loan Documents (collectively, the “Relevant Documents”), sets forth the entire understanding and agreement of the parties hereto in relation to the subject matter hereof and supersedes any prior negotiations and agreements among the parties relating to such subject matter. No promise, condition, representation or warranty, express or implied, not set forth in the Relevant Documents shall bind any party hereto, and no such party has relied on any such promise, condition, representation or warranty. Each of the parties hereto acknowledges that, except as otherwise expressly stated in the Relevant Documents, no representations, warranties or commitments, express or implied, have been made by any party to the other in relation to the subject matter hereof or thereof. None of the terms or conditions of this Amendment may be changed, modified, waived or canceled orally or otherwise, except in writing and in accordance with Section 10.01 of the Credit Agreement.

 

6.    Full Force and Effect of Credit Agreement. Except as hereby specifically amended, waived, modified or supplemented, the Credit Agreement, each Security Instrument, and each other Loan Document is hereby confirmed and ratified in all respects and shall be and remain in full force and effect according to its respective terms. The execution, delivery and effectiveness of this Amendment shall not, except as expressly provided herein, be deemed (a) to be a waiver of, or consent to, or a modification or amendment of, any other term or condition of the Credit Agreement or any other Loan Document other than as expressly set forth herein, (b) to prejudice any right or rights which the Administrative Agent or the Lenders may now have or may have in the future under or in connection with the Credit Agreement or the other Loan Documents or any of the instruments or agreements referred to therein, as the same may be amended, restated, supplemented or modified from time to time, or (c) to be a commitment or any other undertaking or expression of any willingness to engage in any further discussion with the Borrowers, any of their Subsidiaries or any other Person with respect to any other waiver, amendment, modification or any other change to the Credit Agreement or the Loan Documents or any rights or remedies arising in favor of the Lenders or the Administrative Agent, or any of them, under or with respect to any such documents.

 

7.    Counterparts. This Amendment may be executed in any number of counterparts, each of which shall be deemed an original as against any party whose signature appears thereon, and all of which shall together constitute one and the same instrument. Delivery of an executed counterpart of a signature page of this Amendment by telecopy, facsimile or other electronic transmission (including .pdf) shall be effective as delivery of a manually executed counterpart of this Amendment.

 

8.    Governing Law. This Amendment shall in all respects be governed by, and construed in accordance with, the laws of the State of California applicable to contracts executed and to be performed entirely within such State, and shall be further subject to the provisions of Sections 10.14 and 10.15 of the Credit Agreement.

 

9.    Enforceability. Should any one or more of the provisions of this Amendment be determined to be illegal or unenforceable as to one or more of the parties hereto, all other provisions nevertheless shall remain effective and binding on the parties hereto.

 

10.    References. All references in any of the Loan Documents to the “Credit Agreement” shall mean the Credit Agreement, as amended hereby.

 

4

 

11.    Successors and Assigns. This Amendment shall be binding upon and inure to the benefit of the Borrowers, the Administrative Agent and each of the Guarantors and Lenders, and their respective successors, legal representatives, and assignees to the extent such assignees are permitted assignees as provided in Section 10.06 of the Credit Agreement.

 

12.    No Novation. Neither the execution and delivery of this Amendment nor the consummation of any other transaction contemplated hereunder is intended to constitute a novation of the Credit Agreement or of any of the other Loan Documents or any obligations thereunder.

 

[Signature pages follow.]

 

5

 

IN WITNESS WHEREOF, the parties hereto have caused this instrument to be made, executed and delivered by their duly authorized officers as of the day and year first above written.

 

BORROWERS:

 

 

GRANITE CONSTRUCTION INCORPORATED
     
By: /s/ Kenneth B. Olson      
Name: Kenneth B. Olson      
Title: Senior Vice President of Corporate Finance, Treasurer, Assistant Financial Officer & Assistant Secretary
     
     
By: /s/  Elizabeth L. Curtis  
Name: Elizabeth L. Curtis  
Title: Executive Vice President, Chief Financial Officer & Assistant Secretary
     
     
     
GRANITE CONSTRUCTION COMPANY
     
By: /s/ Kenneth B. Olson   
Name: Kenneth B. Olson   
Title: Senior Vice President of Corporate Finance, Treasurer, Assistant Financial Officer & Assistant Secretary
     
     
By: /s/ Elizabeth L. Curtis  
Name: Elizabeth L. Curtis            
Title: Executive Vice President, Chief Financial Officer & Assistant Secretary         
     
     
     
GILC INCORPORATED
     
By: /s/ Kenneth B. Olson   
Name: Kenneth B. Olson   
Title: Senior Vice President and Chief Financial Officer                  
     
     
By: /s/ Elizabeth L. Curtis  
Name: Elizabeth L. Curtis            
Title:  President and Chief Executive Officer  

 

 

 

 

GUARANTORS:

 

 

GRANITE CONSTRUCTION INCORPORATED
     
     
By: /s/ Kenneth B. Olson      
Name: Kenneth B. Olson      
Title: Senior Vice President of Corporate Finance, Treasurer, Assistant Financial Officer & Assistant Secretary
     
By: /s/  Elizabeth L. Curtis  
Name: Elizabeth L. Curtis  
Title: Executive Vice President, Chief Financial Officer & Assistant Secretary
     
     
     
GRANITE CONSTRUCTION COMPANY
     
     
By: /s/ Kenneth B. Olson   
Name: Kenneth B. Olson   
Title: Senior Vice President of Corporate Finance, Treasurer, Assistant Financial Officer & Assistant Secretary
     
By: /s/ Elizabeth L. Curtis  
Name: Elizabeth L. Curtis            
Title: Executive Vice President, Chief Financial Officer & Assistant Secretary         
     
     
     
GILC INCORPORATED
 
     
By: /s/ Kenneth B. Olson   
Name: Kenneth B. Olson   
Title: Senior Vice President and Chief Financial Officer                  
     
By: /s/ Elizabeth L. Curtis  
Name: Elizabeth L. Curtis            
Title:  President and Chief Executive Officer  

 

 

 

LAYNE CHRISTENSEN COMPANY
 
By: /s/ Kenneth B. Olson   
Name: Kenneth B. Olson        
Title: Treasurer & Assistant Secretary
     
By: /s/ Elizabeth L. Curtis  
Name: Elizabeth L. Curtis            
Title: Chief Financial Officer  

 

 
Granite Construction Incorporated
Limited Consent and Amendment No. 5 to Third Amended and Restated Credit Agreement
Signature Page

 

ADMINISTRATIVE AGENT:

BANK OF AMERICA, N.A.,

as Administrative Agent
     
     
By: /s/ Bridgett J. Manduk Mowry       
Name: Bridgett J. Manduk Mowry       
Title: Vice President

 

 
Granite Construction Incorporated
Limited Consent and Amendment No. 5 to Third Amended and Restated Credit Agreement
Signature Page

 

 

LENDERS:

BANK OF AMERICA, N.A., as a Lender, Swing
Line Lender and L/C Issuer
     
     
By: /s/ Mukesh Singh      
Name: Mukesh Singh      
Title: Director          

 

 
Granite Construction Incorporated
Limited Consent and Amendment No. 5 to Third Amended and Restated Credit Agreement
Signature Page

 

 

U.S. BANK NATIONAL ASSOCIATION
     
     
     
By: /s/  Jonathan F. Lindvall     
Name:  Jonathan F. Lindvall       
Title: Senior Vice President

 

 
Granite Construction Incorporated
Limited Consent and Amendment No. 5 to Third Amended and Restated Credit Agreement
Signature Page

 

 

HSBC BANK USA, NATIONAL ASSOCIATION
 
 
     
By: /s/ John Houck           
Name: John Houck           
Title: Associate Relationship Manager

 

 
Granite Construction Incorporated
Limited Consent and Amendment No. 5 to Third Amended and Restated Credit Agreement
Signature Page

 

 

PNC BANK, NATIONAL ASSOCIATION
 
 
     
By: /s/ Diane Truong  
Name: Diane Truong       
Title: Vice President

 

 
Granite Construction Incorporated
Limited Consent and Amendment No. 5 to Third Amended and Restated Credit Agreement
Signature Page

 

 

BMO HARRIS BANK, N.A., SUCCESSOR IN INTEREST TO BANK OF WEST
 
 
By: /s/ Adriana Collins             
Name: Adriana Collins             
Title: Director         

 

 
Granite Construction Incorporated
Limited Consent and Amendment No. 5 to Third Amended and Restated Credit Agreement
Signature Page

 

 

CAPITAL ONE, NATIONAL ASSOCIATION

 
     
By: /s/   David Baynash                
Name:   David Baynash  
Title: Duly Authorized Signatory        

 

 
Granite Construction Incorporated
Limited Consent and Amendment No. 5 to Third Amended and Restated Credit Agreement
Signature Page

 

COMERICA BANK
 
 
     
By: /s/ Collin Miller  
Name: Collin Miller  
Title: Relationship Manager

 

 
Granite Construction Incorporated
Limited Consent and Amendment No. 5 to Third Amended and Restated Credit Agreement
Signature Page

 

 

TRUIST BANK
 
 
     
By: /s/ William P. Rutkowski   
Name: William P. Rutkowski   
Title: Director         

 

 
Granite Construction Incorporated
Limited Consent and Amendment No. 5 to Third Amended and Restated Credit Agreement
Signature Page
EX-99.1 3 ex_516289.htm EXHIBIT 99.1 ex_516289.htm

Exhibit 99.1

 

ex_516289img001.jpg

 

NEWS RELEASE

 

Granite Construction Incorporated Announces Proposed Offering of $325 Million of Convertible Senior Notes due 2028

 

WATSONVILLE, Calif., – May 8, 2023 Granite Construction Incorporated (NYSE: GVA) million in aggregate principal amount of convertible senior notes due 2028 (the “Convertible Notes”). In connection with the offering of the Convertible Notes, Granite expects to grant the initial purchasers of the Convertible Notes an option to purchase up to an additional $48.75 million aggregate principal amount of Convertible Notes.

 

The Convertible Notes will be senior unsecured obligations of Granite, will bear interest payable semi-annually in arrears on May 15 and November 15 of each year, beginning on November 15, 2023, and will mature on May 15, 2028, unless earlier converted, redeemed or repurchased in accordance with their terms. Prior to the close of business on the business day immediately preceding November 15, 2027, the Convertible Notes will be convertible at the option of the holders only upon the occurrence of certain events and during certain periods. Thereafter, the Convertible Notes will be convertible at the option of the holders at any time until the close of business on the second scheduled trading day immediately preceding the maturity date. Upon conversion, Granite will pay or deliver, as the case may be, cash, shares of Granite’s common stock, or a combination of cash and shares of Granite’s common stock, at Granite’s election. The interest rate, initial conversion rate, initial conversion price and other terms of the Convertible Notes will be determined at the time of the pricing of the offering.

 

Granite intends to use a portion of the net proceeds from the offering of the Convertible Notes to pay the cost of entering into capped call transactions in connection with the Convertible Notes. In addition, Granites expects to pay a portion of the net proceeds from the offering and issue shares of Granite’s common stock in exchange for a portion of its outstanding 2.75% convertible senior notes due 2024 (the “2024 notes”), each as described below. If the initial purchasers exercise their option to purchase additional Convertible Notes, Granite intends to use a portion of the net proceeds from the sale of such additional Convertible Notes to pay the cost of entering into additional capped call transactions. Granite also expects to use the net proceeds from the Convertible Notes offering to pay the cost of terminating the portion of its existing warrant transactions (as defined below) that correspond to the 2024 notes exchanged. Granite intends to use the remainder of the net proceeds from the offering to repay amounts outstanding under its revolving credit facility and for general corporate purposes.

 

Concurrently with the pricing of the offering of the Convertible Notes, Granite intends to enter into one or more separate and individually negotiated transactions with one or more holders of its 2024 notes to exchange a portion of the 2024 notes for cash and shares of Granite’s common stock on terms to be negotiated with such holders (the “2024 notes exchanges”). Granite expects that exchanging holders of the 2024 notes may enter into or unwind various derivative transactions with respect to Granite’s common stock (including entering into derivatives with one or more of the initial purchasers in the Convertible Notes offering or their respective affiliates) and/or purchase or sell shares of Granite’s common stock concurrently with or shortly after the pricing of the Convertible Notes offering. This activity could affect the market price of Granite’s common stock and the initial conversion price of the Convertible Notes. Granite cannot predict the magnitude of such market activity or the overall effect it will have on the price of the Convertible Notes or its common stock.

 

 

 

 

In connection with the pricing of the Convertible Notes, Granite also expects to enter into privately negotiated capped call transactions with one or more of the initial purchasers of the Convertible Notes, their respective affiliates and/or other financial institutions (the “option counterparties”). The capped call transactions are expected to cover, subject to anti-dilution adjustments substantially similar to those applicable to the Convertible Notes, the number of shares of Granite’s common stock initially underlying the Convertible Notes. If the initial purchasers of the Convertible Notes exercise their option to purchase additional Convertible Notes, Granite expects to enter into additional capped call transactions with the option counterparties.

 

The capped call transactions are expected generally to reduce the potential dilution to Granite’s common stock upon any conversion of the Convertible Notes and/or offset any cash payments Granite is required to make in excess of the principal amount of converted Convertible Notes, as the case may be. If, however, the market price per share of Granite’s common stock, as measured under the terms of the capped call transactions, exceeds the cap price of the capped call transactions, there would nevertheless be dilution and/or there would not be an offset of such cash payments, in each case, to the extent that such market price exceeds the cap price of the capped call transactions.

 

Granite has been advised that, in connection with establishing their initial hedges of the capped call transactions, the option counterparties or their respective affiliates may enter into various derivative transactions with respect to Granite’s common stock and/or purchase shares of Granite’s common stock concurrently with or shortly after the pricing of the Convertible Notes. This activity could increase (or reduce the size of any decrease in) the market price of Granite’s common stock or the Convertible Notes at that time.

 

In addition, the option counterparties or their respective affiliates may modify their hedge positions by entering into or unwinding various derivatives with respect to Granite’s common stock and/or purchasing or selling shares of Granite’s common stock or other securities of Granite in secondary market transactions following the pricing of the Convertible Notes and prior to the maturity of the Convertible Notes (and are likely to do so during any observation period related to a conversion of the Convertible Notes or following any repurchase of the Convertible Notes by Granite in connection with any fundamental change or otherwise). This activity could also cause or hinder an increase or decrease in the market price of Granite’s common stock or the Convertible Notes, which could affect the holders’ ability to convert the Convertible Notes and, to the extent the activity occurs during any observation period related to a conversion of the Convertible Notes, it could affect the number of shares of Granite’s common stock and the value of the consideration that holders will receive upon conversion of the Convertible Notes.

 

2

 

In connection with the issuance of the 2024 notes, Granite entered into convertible note hedge transactions (the “existing convertible note hedge transactions”) with certain financial institutions (the “existing counterparties”), and Granite also entered into separate warrant transactions (the “existing warrant transactions”) with the existing counterparties. To the extent Granite effects any 2024 notes exchanges, Granite intends to enter into agreements with the existing counterparties to unwind a corresponding portion of the existing convertible note hedge transactions and a corresponding portion of the existing warrant transactions (collectively, the “Unwind Transactions”). In connection with the Unwind Transactions, Granite expects to enter into agreements with the existing counterparties and receive a number of shares of Granite’s common stock (and cash in lieu of any fractional shares) in respect of the unwind of the portion of the existing convertible note hedge transactions that correspond to the 2024 notes exchanges and make payments in cash in respect of the unwind of the portion of the existing warrant transactions that correspond to the 2024 notes exchanges.

 

In connection with the Unwind Transactions, the existing counterparties and/or their respective affiliates may enter into or unwind various derivative transactions with respect to Granite’s common stock and/or purchase or sell shares of Granite’s common stock or other securities of Granite in secondary market transactions concurrently with or shortly after the pricing of the Convertible Notes. This activity may affect the price of Granite’s common stock and, in turn, impact the initial conversion price of the Convertible Notes.

 

The Convertible Notes will be offered through a private placement. The Convertible Notes and the shares of Granite’s common stock issuable upon conversion of the Convertible Notes, if any, have not been and will not be registered under the Securities Act of 1933 (the “Securities Act”), or any state securities laws. As a result, neither the Convertible Notes nor any common stock issuable upon conversion of the Convertible Notes may be offered or sold in the United States except pursuant to an applicable exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state securities laws. Accordingly, the Convertible Notes will be offered only to persons reasonably believed to be “qualified institutional buyers” under Rule 144A of the Securities Act. This news release is neither an offer to sell nor a solicitation of an offer to buy the Convertible Notes or any common stock issuable upon conversion of the Convertible Notes, nor shall there be any sale of any securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.

 

Forward-looking Statements

 

Any statements contained in this news release that are not based on historical facts, including statements about the offering, the intended use of proceeds, the terms of the Convertible Notes, the capped call transactions, the 2024 notes exchanges, and the Unwind Transactions, and the potential impact of the foregoing on dilution to Granite’s stockholders or the market price of Granite’s common stock or the Convertible Notes, constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are identified by words such as “expects,” “estimates,” “intends,” “plans,” “potential,” “may,” “will,” “could,” “would” and the negatives thereof or other comparable terminology or by the context in which they are made. These forward-looking statements are predictions reflecting the best judgment of senior management and reflect our current expectations regarding the offering, the intended use of proceeds, the terms of the Convertible Notes, the capped call transactions, the 2024 notes exchanges, and the Unwind Transactions, and the potential impact of the foregoing on dilution to Granite’s stockholders or the market price of Granite’s common stock or the Convertible Notes. These expectations may or may not be realized. Some of these expectations may be based on beliefs, assumptions or predictions that may prove to be incorrect. In addition, our business and operations involve numerous risks and uncertainties, many of which are beyond our control, which could result in our expectations not being realized or otherwise materially affect our business, financial condition, results of operations, cash flows and liquidity. Such risks and uncertainties include, but are not limited to, the risks related to whether Granite will consummate the offering of the Convertible Notes on the expected terms or at all, the anticipated terms of, and the effects of entering into, the capped call transactions, the 2024 notes exchanges and the Unwind Transactions, market and general conditions, and those described in greater detail in our filings with the Securities and Exchange Commission, particularly those described in our Annual Report on Form 10-K and Quarterly Reports on Form 10-Q.

 

3

 

Due to the inherent risks and uncertainties associated with our forward-looking statements, the reader is cautioned not to place undue reliance on them. The reader is also cautioned that the forward-looking statements contained herein speak only as of the date of this news release and, except as required by law; we undertake no obligation to revise or update any forward-looking statements for any reason.

 

Contacts:

 

Investors

Wenjun Xu, 831-761-7861

 

Or

 

Media

Erin Kuhlman, 831-768-4111

 

Source: Granite Construction Incorporated

 

4
EX-99.2 4 ex_516719.htm EXHIBIT 99.2 ex_516719.htm

Exhibit 99.2

 

ex_516719img001.jpg

 

NEWS RELEASE

 

Granite Construction Incorporated Prices $325 Million Convertible Senior Notes Offering

 

WATSONVILLE, Calif., – May 9, 2023 Granite Construction Incorporated (NYSE: GVA) (“Granite”) today announced the pricing of its previously announced offering of $325 million aggregate principal amount of 3.75% Convertible Senior Notes due 2028 (the “Convertible Notes”). In connection with the offering of the Convertible Notes, Granite granted the initial purchasers of the Convertible Notes the right to purchase up to an additional $48.75 million aggregate principal amount of Convertible Notes. The sale of the Convertible Notes is expected to close on May 11, 2023, subject to customary closing conditions.

 

The Convertible Notes will bear interest at a rate of 3.75% per annum, payable semi-annually in arrears on May 15 and November 15 of each year, beginning on November 15, 2023. The Convertible Notes will mature on May 15, 2028, unless earlier converted, redeemed or repurchased in accordance with their terms. The Convertible Notes will have an initial conversion rate of 21.6807 shares of Granite’s common stock per $1,000 principal amount of the Convertible Notes (equivalent to an initial conversion price of approximately $46.12 per share of Granite’s common stock). The initial conversion price represents a premium of approximately 30.0% to the $35.48 per share closing price of Granite’s common stock on The New York Stock Exchange on May 8, 2023. Prior to the close of business on the business day immediately preceding November 15, 2027, the Convertible Notes will be convertible at the option of the holders only upon the occurrence of certain events and during certain periods. Thereafter, the Convertible Notes will be convertible at the option of the holders at any time until the close of business on the second scheduled trading day immediately preceding their maturity date. Upon conversion, Granite will pay or deliver, as the case may be, cash, shares of Granite’s common stock, or a combination of cash and shares of Granite’s common stock, at Granite’s election.

 

Granite will not be permitted to redeem the Convertible Notes prior to May 20, 2026. On or after May 20, 2026, Granite may redeem for cash all or any portion of the Convertible Notes, at its option, if the last reported sale price of Granite’s common stock has been at least 130% of the conversion price then in effect for a specified period of time. The redemption price will equal 100% of the principal amount of the Convertible Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date. Holders of the Convertible Notes will be able to require Granite to repurchase their Convertible Notes following certain corporate transactions at a repurchase price equal to 100% of the principal amount of the Convertible Notes to be repurchased, plus accrued and unpaid interest, if any, to, but excluding, the repurchase date. Following certain corporate transactions or if Granite issues a notice of redemption, Granite will, in certain circumstances, increase the conversion rate for a holder that elects to convert its Convertible Notes in connection with such corporate transaction or notice of redemption.

 

 

 

 

Granite estimates that the net proceeds from the offering will be approximately $316.0 million (or approximately $363.6 million if the initial purchasers exercise their option to purchase additional Convertible Notes in full), after deducting the initial purchasers’ discount and estimated offering expenses payable by Granite. Granite intends to use approximately $46.1 million of the net proceeds from the Convertible Notes offering to pay the cost of entering into capped call transactions in connection with the Convertible Notes. In addition, Granite intends to pay approximately $198.8 million of the net proceeds from the Convertible Notes offering, and issue approximately 1.39 million shares of Granite common stock, in exchange for approximately $198.7 million in aggregate principal amount of its 2.75% convertible senior notes due 2024 (the “2024 notes”) in separate and individually negotiated transactions entered into concurrently with the pricing of the offering (the “2024 notes exchanges”). If the initial purchasers exercise their option to purchase additional Convertible Notes, Granite intends to use a portion of the additional net proceeds to pay the cost of entering into additional capped call transactions. Granite also intends to use approximately $13.2 million of the net proceeds from the Convertible Notes offering to pay the cost of terminating the portion of its existing warrants transactions (as defined below) that correspond to the 2024 notes exchanged. Granite intends to use the remainder of the net proceeds from the offering to repay amounts outstanding under its revolving credit facility and for general corporate purposes.

 

In connection with the exchange transactions described above, Granite expects that exchanging holders of the 2024 notes may enter into or unwind various derivatives with respect to Granite’s common stock (including entering into derivatives with one or more of the initial purchasers in the Convertible Notes offering or their respective affiliates) and/or purchase or sell shares of Granite’s common stock concurrently with or shortly after the pricing of the Convertible Notes offering. This activity could affect the market price of Granite’s common stock and the initial conversion price of the Convertible Notes. Granite cannot predict the magnitude of such market activity or the overall effect it will have on the price of the Convertible Notes or its common stock.

 

In connection with the pricing of the Convertible Notes, Granite entered into privately negotiated capped call transactions with certain of the initial purchasers of the Convertible Notes or their respective affiliates and certain other financial institutions (the “option counterparties”). The capped call transactions will cover, subject to anti-dilution adjustments substantially similar to those applicable to the Convertible Notes, the number of shares of Granite’s common stock initially underlying the Convertible Notes. If the initial purchasers of the Convertible Notes exercise their option to purchase additional Convertible Notes, Granite expects to enter into additional capped call transactions with the option counterparties.

 

 

The cap price of the capped call transactions will initially be $79.83 per share, which represents a premium of 125% over the last reported sale price of Granite’s common stock of $35.48 per share on The New York Stock Exchange on May 8, 2023, and is subject to certain adjustments under the terms of the capped call transactions.

 

2

 

The capped call transactions are expected generally to reduce the potential dilution to Granite’s common stock upon any conversion of the Convertible Notes and/or offset any cash payments Granite is required to make in excess of the principal amount of converted Convertible Notes, as the case may be. If, however, the market price per share of Granite’s common stock, as measured under the terms of the capped call transactions, exceeds the cap price of the capped call transactions, there would nevertheless be dilution and/or there would not be an offset of such cash payments, in each case, to the extent that such market price exceeds the cap price of the capped call transactions.

 

Granite has been advised that, in connection with establishing their initial hedges of the capped call transactions, the option counterparties or their respective affiliates expect to enter into various derivative transactions with respect to Granite’s common stock and/or purchase shares of Granite’s common stock concurrently with or shortly after the pricing of the Convertible Notes. This activity could increase (or reduce the size of any decrease in) the market price of Granite’s common stock or the Convertible Notes at that time.

 

In addition, the option counterparties or their respective affiliates may modify their hedge positions by entering into or unwinding various derivatives with respect to Granite’s common stock and/or purchasing or selling shares of Granite’s common stock or other securities of Granite in secondary market transactions following the pricing of the Convertible Notes and prior to the maturity of the Convertible Notes (and are likely to do so during any observation period related to a conversion of the Convertible Notes or following any repurchase of the Convertible Notes by Granite in connection with any fundamental change or otherwise). This activity could also cause or hinder an increase or decrease in the market price of Granite’s common stock or the Convertible Notes, which could affect the holders’ ability to convert the Convertible Notes and, to the extent the activity occurs during any observation period related to a conversion of the Convertible Notes, it could affect the number of shares of Granite’s common stock and the value of the consideration that holders will receive upon conversion of the Convertible Notes.

 

In connection with the issuance of the 2024 notes, Granite entered into convertible note hedge transactions (the “existing convertible note hedge transactions”) with certain financial institutions (the “existing counterparties”), and Granite also entered into separate warrant transactions (the “existing warrant transactions”) with the existing counterparties. In connection with the 2024 notes exchanges, Granite entered into partial unwind agreements (the “Unwind Agreements”) with the existing counterparties, concurrently with the offering, to unwind a corresponding portion of the existing convertible note hedge transactions and the existing warrant transactions (collectively, the “Unwind Transactions”). In connection with the Unwind Transactions and pursuant to the Unwind Agreements, Granite will receive 1.39 million shares of Granite’s common stock (and cash in lieu of any fractional shares) in respect of the unwind of the portion of the existing convertible note hedge transactions that correspond to the 2024 notes exchanges and make payments of $13.2 million in cash in respect of the unwind of the portion of the existing warrant transactions that correspond to the 2024 notes exchanges.

 

In connection with the Unwind Transactions, the existing counterparties and/or their respective affiliates may enter into or unwind various derivative transactions with respect to Granite’s common stock and/or purchase or sell shares of Granite’s common stock or other securities of Granite in secondary market transactions concurrently with or shortly after the pricing of the Convertible Notes. This activity may affect the price of Granite’s common stock and, in turn, impact the initial conversion price of the Convertible Notes.

 

The Convertible Notes will be offered through a private placement. The Convertible Notes and the shares of Granite’s common stock issuable upon conversion of the Convertible Notes, if any, have not been and will not be registered under the Securities Act of 1933 (the “Securities Act”), or any state securities laws. As a result, neither the Convertible Notes nor any common stock issuable upon conversion of the Convertible Notes may be offered or sold in the United States except pursuant to an applicable exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state securities laws. Accordingly, the Convertible Notes will be offered only to persons reasonably believed to be “qualified institutional buyers” under Rule 144A of the Securities Act. This news release is neither an offer to sell nor a solicitation of an offer to buy the Convertible Notes or any common stock issuable upon conversion of the Convertible Notes, nor shall there be any sale of any securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.

 

3

 

Forward-looking Statements

 

Any statements contained in this news release that are not based on historical facts, including statements about the offering, the expected closing of the offering, the intended use of proceeds, and the potential impact of the capped call transactions, the 2024 notes exchanges and the Unwind Transactions on dilution to Granite’s stockholders or the market price of Granite’s common stock or the Convertible Notes, constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are identified by words such as “expects,” “estimates,” “intends,” “plans,” “potential,” “may,” “will,” “could,” “would” and the negatives thereof or other comparable terminology or by the context in which they are made. These forward-looking statements are predictions reflecting the best judgment of senior management and reflect our current expectations regarding the offering, the expected closing of the offering, the intended use of proceeds, and the potential impact of the capped call transactions, the 2024 notes exchanges and the Unwind Transactions on dilution to Granite’s stockholders or the market price of Granite’s common stock or the Convertible Notes. These expectations may or may not be realized. Some of these expectations may be based on beliefs, assumptions or predictions that may prove to be incorrect. In addition, our business and operations involve numerous risks and uncertainties, many of which are beyond our control, which could result in our expectations not being realized or otherwise materially affect our business, financial condition, results of operations, cash flows and liquidity. Such risks and uncertainties include, but are not limited to, the risks related to whether Granite will consummate the offering of the Convertible Notes on the expected terms or at all, the anticipated terms of, and the effects of entering into, the capped call transactions, the 2024 notes exchanges and the Unwind Transactions, market and general conditions, and those described in greater detail in our filings with the Securities and Exchange Commission, particularly those described in our Annual Report on Form 10-K and Quarterly Reports on Form 10-Q.

 

Due to the inherent risks and uncertainties associated with our forward-looking statements, the reader is cautioned not to place undue reliance on them. The reader is also cautioned that the forward-looking statements contained herein speak only as of the date of this news release and, except as required by law; we undertake no obligation to revise or update any forward-looking statements for any reason.

 

Contacts:

 

Investors

Wenjun Xu, 831-761-7861

 

Or

 

Media

Erin Kuhlman, 831-768-4111

 

Source: Granite Construction Incorporated

 

4
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Document And Entity Information
May 08, 2023
Document Information [Line Items]  
Entity, Registrant Name GRANITE CONSTRUCTION INCORPORATED
Document, Type 8-K
Document, Period End Date May 08, 2023
Entity, Incorporation, State or Country Code DE
Entity, File Number 1-12911
Entity, Tax Identification Number 77-0239383
Entity, Address, Address Line One 585 West Beach Street
Entity, Address, City or Town Watsonville
Entity, Address, State or Province CA
Entity, Address, Postal Zip Code 95076
City Area Code 831
Local Phone Number 724-1011 
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Title of 12(b) Security Common Stock
Trading Symbol GVA
Security Exchange Name NYSE
Entity, Emerging Growth Company false
Amendment Flag false
Entity, Central Index Key 0000861459
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