Ormat Technologies Inc. Closes Upsized $1 Billion Convertible Senior Notes Offering
On March 23, 2026, Ormat Technologies, Inc. (NYSE: ORA) announced the successful closing of its previously disclosed private offering of $1 billion in aggregate principal amount of convertible senior notes. This offering included the full exercise of the initial purchasers' option to acquire additional notes, indicating strong investor interest and confidence in the company’s growth trajectory.
1. Breakdown of the Offering
The offering comprises two distinct series of notes:
- Series A Convertible Senior Notes: $825 million aggregate principal amount with an interest rate of 1.50% per year, payable semi-annually in arrears. These notes are set to mature on March 15, 2031.
- Series B Convertible Senior Notes: $175 million aggregate principal amount with a 0.00% interest rate, also maturing on March 15, 2031. Notably, holders of the Series B Notes have the option to require the company to repurchase their notes on March 15, 2027, at a repurchase price equal to 100% of the principal amount, plus any accrued and unpaid special interest.
Both series of notes were sold to qualified institutional buyers in accordance with Rule 144A under the Securities Act of 1933.
2. Strategic Insights from Management
Doron Blachar, Chief Executive Officer of Ormat Technologies, expressed satisfaction with the outcome of the offering, highlighting the company’s strategic approach to capital raising. “We are pleased with the successful completion of this offering, capitalizing on strong demand and a robust convertible securities market,” he noted. Blachar emphasized that this capital raise provides a favorable combination of low cash coupon rates and enhanced financial flexibility, ultimately reducing equity dilution compared to traditional debt and equity financing options.
He further remarked, “This strategic capital raise strengthens our balance sheet and enhances our ability to grow our business.” The strong institutional participation was indicative of the positive investor sentiment surrounding the geothermal and energy storage sectors, which are pivotal in the evolving electricity landscape.
3. Use of Proceeds
Ormat Technologies plans to allocate approximately $287.9 million from the offering’s net proceeds to repurchase a portion of its existing 2.50% convertible senior notes due 2027. This will be supplemented by around $25 million in cash on hand and the issuance of approximately 0.6 million shares of common stock. Additionally, the company intends to use about $25 million of the net proceeds for the repurchase of its common stock, while the remainder will be utilized for general corporate purposes.
4. About Ormat Technologies
Established over five decades ago, Ormat Technologies is a leader in the geothermal sector and is unique in its vertical integration, engaging in geothermal and recovered energy generation (REG). The company is strategically positioning itself to accelerate long-term growth in the energy storage market. Ormat owns, operates, designs, and manufactures geothermal and REG power plants, boasting a current generating capacity portfolio of approximately 1,835 MW, which includes 1,340 MW from geothermal and solar generation across the globe, as well as a 495 MW energy storage portfolio based in the U.S.
5. Conclusion
The closing of this $1 billion convertible senior notes offering not only strengthens Ormat Technologies’ financial standing but also reinforces its commitment to expanding in the geothermal and energy storage markets. As the company continues to leverage its core competencies in a rapidly evolving energy landscape, it remains well-positioned to deliver robust shareholder returns and contribute significantly to sustainable energy solutions.
