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SunPower Announces Offerings of 9,000,000 Shares of Class A Common Stock and $175 Million of Senior Convertible Debentures

Posted on: Monday, 27 April 2009, 15:47 CDT

SAN JOSE, Calif., April 27 /PRNewswire-FirstCall/ -- SunPower Corporation (Nasdaq: SPWRA; SPWRB), a Silicon Valley-based provider of high efficiency solar cells, solar panels, and solar systems, today announced that it intends to offer 9,000,000 shares of class A common stock and $175 million aggregate principal amount of senior convertible debentures due 2014, in underwritten registered public offerings. In connection with these offerings, SunPower intends to grant the underwriters an overallotment option with respect to an additional 1,350,000 shares of class A common stock and an additional $26.25 million aggregate principal amount of senior convertible debentures. Based on the closing price of SunPower's class A common stock on The Nasdaq Global Select Market on April 24, 2009, the offerings (without giving effect to any exercise of the overallotment options) are expected to result in aggregate gross proceeds of approximately $400 million.

The debentures will be convertible into shares of SunPower's class A common stock. The interest rate, conversion rate, conversion price and other terms of the debentures will be determined at the time of the pricing of the offering. The debentures will be senior, unsecured obligations, ranking equally with all existing and future senior unsecured indebtedness of SunPower. The debentures will be effectively subordinated to the company's secured indebtedness to the extent of the value of the related collateral and structurally subordinated to indebtedness and other liabilities of SunPower's subsidiaries.

Credit Suisse Securities (USA) LLC and Deutsche Bank Securities Inc. will serve as joint book-running managers for the offerings.

In connection with the offering of senior convertible debentures, SunPower plans to enter into convertible debenture hedge and warrant transactions with affiliates of certain of the underwriters. The convertible debenture hedge transactions are intended to reduce the potential dilution upon conversion of the senior convertible debentures. SunPower expects that the counterparties will enter into various over-the-counter derivative transactions with respect to SunPower's class A common stock concurrently with, or shortly after, the pricing of the senior convertible debenture offering and may unwind or enter into various over-the-counter derivatives and/or purchase SunPower's class A common stock in secondary market transactions following the pricing of the senior convertible debenture offering. These activities could have the effect of increasing or preventing a decline in the price of SunPower's class A common stock concurrently with or following the pricing of the senior convertible debenture offering.

SunPower intends to use approximately $20 million to $22 million of the proceeds from these offerings to pay the cost of these convertible debenture hedge and warrant transactions. The company also intends to use the remaining net proceeds for general corporate purposes, including working capital and capital expenditures. From time to time, SunPower will evaluate potential acquisitions and strategic transactions of business, technologies, or products, and may use a portion of the net proceeds for such acquisitions or transactions. Currently, however, the company does not have any agreements with respect to any such material acquisitions or strategic transactions. If the underwriters exercise their overallotment option with respect to the senior convertible debentures, SunPower intends to use a portion of the proceeds therefrom to increase the size of the convertible note hedge transactions and for general corporate purposes, and may also sell additional warrants.

SunPower may use a portion of the proceeds from these offerings to repurchase some of its outstanding 1.25% debentures or 0.75% debentures. The company expects that holders of its outstanding 1.25% debentures or 0.75% debentures from whom it may repurchase such debentures (which holders may include one or more of the underwriters), may have outstanding short hedge positions in its class A common stock relating to such debentures. Upon repurchase, SunPower expects that such holders will unwind or offset those hedge positions by purchasing class A common stock in secondary market transactions, including purchases in the open market, and/or entering into various derivative transactions with respect to our class A common stock. These activities could have the effect of increasing, or preventing a decline in, the market price of our class A common stock. The effect, if any, of any of these transactions and activities on the market price of its class A common stock or the debentures will depend in part on market conditions and cannot be ascertained at this time, but may be material.

The closing of each offering is not contingent on the closing of the other.

A registration statement has been filed, and a separate preliminary prospectus supplement for each of the class A common stock and senior convertible debenture offerings will be filed, with the Securities and Exchange Commission, to which this communication relates. Prospective investors should read the applicable preliminary prospectus supplement and accompanying prospectus included in that registration statement and other documents SunPower has filed with the SEC for more complete information about the company and these offerings. These documents are available at no charge by visiting EDGAR on the SEC Web site at http://www.sec.gov. Alternatively, the prospectus, the class A common stock prospectus supplement and the senior convertible debenture prospectus supplement may be obtained from Credit Suisse Securities (USA) LLC, One Madison Avenue, New York, NY 10010, (tel): 1 800-221-1037 and/or Deutsche Bank Securities Inc. Attention: Prospectus Department, 100 Plaza One, Jersey City, New Jersey 07311, (tel): 1 800-503-4611.

This announcement is neither an offer to sell nor a solicitation of an offer to buy the securities described herein, nor shall there be any sale of these securities in any jurisdiction in which such an offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such jurisdiction. The offerings of these securities will be made only by means of applicable prospectus supplements and the related prospectus. The securities being offered have not been approved or disapproved by any regulatory authority, nor has any such authority passed upon the accuracy or adequacy of the registration statement, the prospectus contained therein or the applicable prospectus supplement.

NOTE: This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including statements regarding the offerings (including the size of the offerings and whether the offerings will be completed), the use of proceeds from the offerings, and the effects of the related debenture hedge and warrant transactions (including their effect on our stock price and whether the hedge and warrant transactions will be completed). Forward-looking statements are statements that do not represent historical facts. We use words such as "may," "will," "should," "could," "would," "expect," "anticipated," "believe," "estimate," "predict," "potential," "continue" and similar expressions to identify forward-looking statements. These forward-looking statements involve risks and uncertainties. Factors that could cause actual events to differ materially from those predicted in such forward-looking statements include market conditions, the behavior of our hedge counterparties, potential fluctuations in SunPower's stock price, management's broad discretion over the use of the net proceeds of the offering, or changes in U.S. generally accepted accounting principles or in their interpretation. Certain of these risks and others are detailed from time to time in SunPower's periodic reports filed with the Securities and Exchange Commission, including, but not limited to, its annual report on Form 10-K for the year ended December 28, 2008 and its quarterly report on Form 10-Q for the quarter ended March 29, 2009.

SunPower is a registered trademark of SunPower Corp. All other trademarks are the property of their respective owners.

SOURCE SunPower Corporation

Source: PR Newswire

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