BTU · Peabody Energy Corporation

Peabody Energy Corporation priced a private offering of $225 million aggregate principal amount of 0.50% convertible senior notes due 2031. The notes were offered to qualified institutional buyers under Rule 144A. The initial conversion rate is 26.0970 shares per $1,000 principal, corresponding to an initial conversion price of approximately $38.32 per share, a 32.5% premium over the May 28, 2026 VWAP of $28.92. Peabody granted underwriters an option to purchase up to an additional $25 million in notes. Net proceeds are estimated at $218.9 million (or $243.3 million if fully exercised). Peabody intends to use about $15 million to enter into capped call transactions with the initial purchasers or their affiliates, which are expected to reduce potential dilution from conversion and offset cash payments above par, capped at an initial price of $50.61 per share. The remaining net proceeds, combined with available cash, will be used to repurchase approximately $241.2 million aggregate principal amount of its outstanding 3.250% convertible senior notes due 2028 at a cash purchase price of roughly $388.8 million. This refinancing extends Peabody's debt maturity profile and lowers the interest rate from 3.25% to 0.50%. The notes mature on June 1, 2031, unless earlier repurchased, redeemed, or converted. Interest is payable semi-annually starting December 1, 2026. The offering is expected to settle on June 2, 2026.