JA Solar prices $350M convertible notes offering

Previously, the company said it planned to offer $300 million of the notes.

JA Solar has also granted the underwriters the option to buy up to an additional $50 million of notes to cover any overallotments.

The notes, which mature on May 15, 2013, will pay interest semiannually at an annual rate of 4.5 percent. The notes will be convertible into cash, ADS, or a combination of both at an initial conversion price of about $30.48 per ADS.

Additionally, JA Solar will lend up to 13.1 million ADS to affiliates of the underwriters, who will sell the ADS at the same time as the notes offering. About 6.6 million of the borrowed ADS will be offered at $23 each. The remaining ADS will be sold at prevailing market prices at the time of sale. The delivery of the borrowed ADS is contingent upon the completion of the notes offering, the company said.

JA Solar will not receive any of the proceeds from the sale of the borrowed ADS, but will receive a nominal lending fee. Proceeds from the notes offering, after expenses, will be about $311 million, or $355.8 million if the underwriters exercise their overallotment option in full.

JA Solar plans to use the proceeds to buy manufacturing equipment and raw materials, to fund the construction of facilities, for working capital and other general corporate purposes.

JA Solar has also purchased call options from affiliates of the underwriters with a strike price equal to the conversion price of the notes and a cap price of $37.38 per ADS. A capped option is automatically exercised when the underlying security closes at or above the option's cap price. The capped call transactions are expected to reduce the potential dilution upon conversion of the notes, JA Solar said.

Lehman Brothers Inc. and Credit Suisse Securities LLC are serving as joint book-running managers for both offerings. Needham & Co. and Piper Jaffray & Co. are also serving as underwriters.

ADS gained $1.45, or 6.1 percent, to $25.15 in morning trading.