Key Highlights

• The Company may redeem the Notes at its option, but only if the last reported sale price per share of the Company’s common stock exceeds 175% of the conversion price.

Introduction Overview

Sable Offshore Corp. (NYSE: SOC) has announced the issuance of $345.0 million aggregate principal amount of its 6.5% Convertible Senior Notes due 2031. This financial move is expected to have a significant impact on the company's investment portfolio. The Notes are the company's senior, unsecured obligations.

Redemption Terms

The Company may redeem the Notes at its option, but only if the last reported sale price per share of the Company’s common stock exceeds 175% of the conversion price on at least 20 trading days during the 30 consecutive trading days ending on, and including, the trading day immediately before the date the Company sends the related redemption notice. The redemption price will be a cash amount equal to the principal amount of the Notes to be redeemed, plus accrued and unpaid interest.

Conversion Rights

Before April 1, 2031, noteholders will have the right to convert their Notes only upon the occurrence of certain events. From and after April 1, 2031, 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. The Company will settle conversions by paying or delivering, as applicable, cash, shares of its common stock or a combination of cash and shares of its common stock.

Events of Default

The Notes have customary provisions relating to the occurrence of Events of Default, which include payment defaults, failure to send certain notices, and defaults in the Company's obligation to convert a Note upon the exercise of the conversion right. If an Event of Default involving bankruptcy, insolvency or reorganization events with respect to the Company occurs, then the principal amount of, and all accrued and unpaid interest on, all of the Notes then outstanding will immediately become due and payable.

Additional Terms

The Company may not redeem less than all of the outstanding Notes unless at least $100 million aggregate principal amount of Notes are outstanding and not called for redemption as of the time the Company sends the related redemption notice. The Notes are effectively subordinated to the Company's existing and future secured indebtedness, to the extent of the value of the collateral securing that indebtedness.

Financial Implications

The issuance of the Convertible Senior Notes is expected to have a significant impact on Sable Offshore Corp.'s (NYSE: SOC) financial position, with the potential to increase its liquidity and flexibility. The company's ability to redeem the Notes at its option provides an additional layer of financial management.

This article is for informational purposes only and does not constitute financial advice. Please consult a licensed financial adviser before making investment decisions.