Solaris Energy Infrastructure, Inc. Proposes $600 Million Convertible Notes Offering for Growth and Debt Refinancing

Proposed Capital Raise for Growth and Debt Refinancing

Solaris Energy Infrastructure, Inc. (NYSE: SEI) has announced a proposed public offering of $600 million aggregate principal amount of convertible senior notes due 2031. This offering includes an option for the underwriters to purchase up to an additional $90 million aggregate principal amount of notes, contingent upon market and other conditions. The notes are structured as senior, unsecured obligations of Solaris, accruing interest payable semi-annually and maturing on October 1, 2031.

Proceeds from this notes offering are earmarked for several strategic initiatives. A significant portion, approximately $320.9 million, is designated for repaying outstanding debt under its Term Loan Agreement. Furthermore, a part of the net proceeds will fund capped call transactions, which are intended to mitigate potential dilution to existing shareholders upon conversion of the notes. Critically, the capital infusion will also support growth capital expenditures, including the purchase of approximately 80 megawatts (MW) of new turbine capacity for delivery in late fourth quarter 2025, underscoring Solaris's commitment to expanding its distributed power generation capabilities.

Noteholders will possess conversion rights under certain circumstances, allowing them to convert their notes into cash, shares of Solaris's Class A common stock, or a combination thereof, at the company's election. Solaris retains the option to redeem the notes, in whole or in part, on or after October 2, 2028, if its Class A common stock price exceeds 130% of the conversion price for a specified period.

Morgan Stanley & Co. LLC, Goldman Sachs & Co. LLC, and Santander US Capital Markets LLC are serving as book-running managers for the offering.

Concurrent Delta Offering and Hedging Mechanics

Concurrently with the convertible senior notes offering, Morgan Stanley & Co. LLC is undertaking a separate, underwritten offering of Solaris's Class A common stock. This "concurrent delta offering" involves shares borrowed from third parties and is designed to facilitate hedging transactions by some of the purchasers of the notes, whether through physical means or derivatives. It is crucial to note that Solaris will not issue new shares of Class A common stock for this concurrent delta offering, nor will the company receive any proceeds from it. The number of shares involved will be determined at the pricing of the delta offering and is expected to be consistent with commercially reasonable initial short positions for hedging investors.

Both the concurrent delta offering and the offering of the notes are interdependent and contingent upon one another. The use of capped call transactions by Solaris is a financial strategy commonly employed with convertible debt to generally reduce the potential dilutive impact on common shares during conversion, and/or to offset cash payments that Solaris might be required to make beyond the principal amount of converted notes.

Market Implications and Investor Sentiment

Market sentiment surrounding this announcement is characterized by uncertainty. While the capital raise provides Solaris with substantial funds for growth initiatives and debt reduction, which typically signals a positive outlook, the financial engineering involved with convertible notes and the concurrent delta hedging introduces complexities for investors. The potential for future dilution, even with capped call protection, and the short-term volatility associated with hedging activities contribute to a mixed perception.

Solaris has filed a shelf registration statement on Form S-3 with the Securities and Exchange Commission (SEC) for these offerings, providing the regulatory framework for the transactions. The last reported sale price of Solaris's Class A common stock was $44.64 per share on October 3, 2025, which serves as a baseline for investors assessing the terms of the convertible notes and potential conversion premiums.

Strategic Vision and Outlook

Solaris Energy Infrastructure, Inc. specializes in providing scalable equipment-based solutions for distributed power generation and the management of raw materials used in oil and natural gas wells. Headquartered in Houston, Texas, the company serves diverse U.S. end markets, including energy, data centers, and other commercial and industrial sectors.

The strategic deployment of capital to repay debt and invest in significant new turbine capacity aligns with Solaris's stated goal of strengthening its market position and supporting its business lines. The long-term implications hinge on the effective utilization of the raised capital to drive operational efficiencies and expand its service offerings. Investors will be closely monitoring the successful completion of both offerings, the actual impact of the capital deployment on Solaris's revenue and earnings, and the ultimate trajectory of SEI's stock performance as these market uncertainties resolve and growth initiatives come to fruition.

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[1] Solaris Energy Infrastructure, Inc. Announces Proposed Offering of Borrowed Class A Common Stock to Facilitate Hedging Transactions (https://finance.yahoo.com/news/solaris-energy ...)[2] Solaris Energy Infrastructure, Inc. Announces Proposed Offering of Borrowed Class A Common Stock to Facilitate Hedging Transactions - Business Wire (https://vertexaisearch.cloud.google.com/groun ...)[3] GDS Announces Pricing of Public Offering of ADSs - Stock Titan (https://vertexaisearch.cloud.google.com/groun ...)

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