MP Materials : Material Agreement - Form 8-K

Item 1.01.

Entry Into a Material Definitive Agreement.

3.00% Convertible Senior Notes due 2030

On March 7, 2024, MP Materials Corp. (the "Company") completed its previously disclosed private Rule 144A offering of $650.0 million aggregate principal amount of its 3.00% Convertible Senior Notes due 2030 (the "Base Notes") at an issue price of 100%. The Company granted the initial purchasers an option to purchase, for settlement within a 13-dayperiod beginning on, and including, the date the Company first issued the Base Notes, up to an additional $97.5 million aggregate principal amount of notes, on the same terms and conditions (the "Additional Notes" and, together with the Base Notes, the "Notes"). On March 6, 2024, the initial purchasers elected to exercise the option in full and a total of $747.5 million aggregate principal amount of Notes were issued on March 7, 2024. The Notes were offered only to persons reasonably believed to be qualified institutional buyers (as defined in the Securities Act of 1933, as amended (the "Securities Act")) pursuant to Rule 144A under the Securities Act.

The net proceeds from the sale of the Notes were approximately $731.1 million, after deducting initial purchasers' discounts and estimated offering expenses, but before deducting the cost of the Capped Call Transactions (as defined below). The Company intends to use the net proceeds from the Notes offering (i) to fund the approximate $65.3 million cost of entering into the Capped Call Transactions, (ii) to repurchase approximately 12.3 million shares of common stock, using approximately $191.6 million of the net proceeds from the offering, (iii) to repurchase approximately $400.0 million in aggregate principal amount of its 0.25% green convertible senior notes due 2026 (the "2026 notes") using approximately $358.4 million of the net proceeds from the Notes offering and (iv) for general corporate purposes.

Capped Call Transactions

On March 4, 2024, in connection with the pricing of the Base Notes, the Company entered into privately negotiated capped call transactions (the "Base Capped Call Transactions") with certain financial institutions (collectively, the "Counterparties"). On March 6, 2024, in connection with the Initial Purchasers' exercise of their option to purchase the Additional Notes, the Company entered into privately negotiated additional capped call transactions (the "Additional Capped Call Transactions," and together with the Base Capped Call Transactions, the "Capped Call Transactions") with the Counterparties. Certain of the Counterparties are affiliates of the Initial Purchasers under the Purchase Agreement. The Capped Call Transactions cover, subject to anti-dilution adjustments substantially similar to those in the Notes, approximately 34.4 million shares of the Company's common stock, par value $0.0001 per share ("common stock"), the same number of shares initially underlying the Notes. The Capped Call Transactions have an expiration date of March 1, 2030.

The Capped Call Transactions are expected generally to reduce the potential dilution to the common stock upon conversion of the Notes and/or offset cash payments the Company is required to make in excess of the principal amount of the converted Notes, as the case may be, in the event that the market price per share of common stock, as measured under the terms of the Capped Call Transactions, is greater than the strike price of the Capped Call Transactions, which initially corresponds to the initial conversion price of the Notes, or approximately $21.74 per share of common stock, with such reduction and/or offset subject to a cap of initially $31.06 per share of common stock.

The Capped Call Transactions are separate transactions, entered into by the Company with each of the Counterparties, and are not part of the terms of the Notes. Holders of the Notes will not have any rights with respect to the Capped Call Transactions.

The form of the confirmation for the Capped Call Transactions entered into with each of the Counterparties is attached hereto as Exhibit 10.1 and is incorporated herein by reference. The foregoing description of the Capped Call Transactions does not purport to be complete and is qualified in its entirety by reference to such exhibit.

Indenture

The Company issued the Notes under an indenture, dated as of March 7, 2024 (the "Indenture"), between the Company and U.S. Bank Trust Company, National Association, as trustee (the "Trustee"). The Indenture (which includes the Form of 3.00% Convertible Senior Notes due 2030 filed as Exhibit 4.2 hereto) is filed as Exhibit 4.1 hereto and is incorporated herein by reference.

The Notes bear interest at a rate of 3.00% per annum from and including March 7, 2024, payable semi-annually in arrears on March 1 and September 1 of each year, beginning on September 1, 2024. The Notes will mature on March 1, 2030, unless earlier redeemed or repurchased by the Company or converted in accordance with their terms prior to such date.

The Notes will be convertible into cash, shares of common stock, or a combination of cash and shares of common stock at the Company's election at an initial conversion rate of 45.9939 shares of common stock per $1,000 principal amount of the Notes, which is equivalent to an initial conversion price of approximately $21.74 per share of common stock. The conversion rate will be subject to adjustment upon the occurrence of certain specified events, but will not be adjusted for any accrued and unpaid interest. In addition, if certain Make-Whole Fundamental Changes (as defined in Section 1.01 of the Indenture) occur or if the Notes are subject to redemption, the Company will, in certain circumstances, increase the conversion rate for any Notes converted in connection with such Make-Whole Fundamental Change or such redemption.

The Notes are convertible at the option of the holders (in whole or in part) at any time prior to the close of business on the business day immediately preceding December 1, 2029 only under the following circumstances: (1) during any calendar quarter commencing after the calendar quarter ending on June 30, 2024 (and only during such calendar quarter), if the last reported sale price of the common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day; (2) during the five business day period after any ten consecutive trading day period (the "measurement period") in which the trading price per $1,000 principal amount of Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of the common stock and the conversion rate on each such trading day; (3) if the Company calls any or all of the Notes for redemption, the notes called for redemption may be converted at any time prior to the close of business on the second scheduled trading day immediately preceding the redemption date; or (4) upon the occurrence of specified corporate events set forth in the Indenture. On or after December 1, 2029 until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert their Notes at any time, regardless of the foregoing circumstances. Upon conversion, the Company will pay or deliver, as the case may be, cash, shares of common stock or a combination of cash and shares of common stock, at the Company's election, in amounts determined in the manner set forth in the Indenture.

The Notes are not redeemable prior to March 5, 2027. The Company may redeem for cash all or some portion of the Notes (subject to a limitation on partial redemption), at the Company's option, on or after March 5, 2027 and prior to the 41^st scheduled trading day immediately preceding the maturity date, if certain liquidity conditions are satisfied and the last reported sale price of the common stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) (including the trading day immediately preceding the date on which the Company provides notice of redemption) during any 30 consecutive trading day period ending on, and including, the trading day immediately preceding the date on which the Company provides a notice of redemption, at a redemption price equal to 100% of the principal amount of the Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date. No sinking fund is provided for the Notes.

If the Company undergoes a Fundamental Change (as defined in Section 1.01 of the Indenture), holders may require the Company to repurchase for cash all or part of their Notes in authorized denominations at a purchase price equal to 100% of the principal amount of the Notes to be repurchased, plus accrued and unpaid interest to, but excluding, the Fundamental Change repurchase date.

The Notes will be senior unsecured obligations of the Company and will rank senior in right of payment to any of the Company's indebtedness that is expressly subordinated in right of payment to the Notes; equal in right of payment to any of the Company's unsecured indebtedness that is not so subordinated; effectively junior in right of payment to any of the Company's senior, secured indebtedness to the extent of the value of the assets securing such indebtedness; and structurally subordinated to all indebtedness and other liabilities (including trade payables) of the Company's subsidiaries.

The Indenture contains customary terms and covenants, including that upon certain events of default, including cross-acceleration to certain other indebtedness of the Company and its subsidiaries, either the Trustee or the holders of not less than 25% in aggregate principal amount of the Notes then outstanding may declare the unpaid principal of the Notes and accrued and unpaid interest, if any, thereon immediately due and payable. In the case of certain events of bankruptcy, insolvency or reorganization relating to the Company, the principal amount of the Notes together with accrued and unpaid interest, if any, thereon will automatically become and be immediately due and payable.

The Notes will not be listed on any securities exchange.

The descriptions of the Indenture and the Notes contained herein are qualified in their entirety by reference to the text of the Indenture and the Form of 3.00% Convertible Senior Notes due 2030, which are attached as Exhibits 4.1 and 4.2, respectively, to this Current Report on Form 8-Kand are incorporated herein by reference.