Curaleaf proposes $500-million (U.S.) notes offering

Executive Summary

• Curaleaf Holdings Inc. has secured commitments for a $500 million private placement of 11.5% senior secured notes due February 1, 2029.
• The proceeds will primarily refinance approximately $457 million of existing senior secured notes due December 15, 2026, with the remaining balance providing incremental capital for global growth initiatives and transaction expenses.
• The offering is described as the largest note offering in the U.S. cannabis industry to date, featuring 10 first-time cannabis lenders and aiming to strengthen the balance sheet and extend maturities.

Key Details

• Transaction Structure: Private placement of $500 million (U.S.) aggregate principal amount of 11.5% senior secured notes.
• Maturity Date: February 1, 2029.
• Interest Rate: 11.5% per annum, payable semi-annually in equal installments.
• Issue Price: 100% of face value.
• Use of Proceeds:
  • Refinancing existing $475 million senior secured notes due December 15, 2026 (of which $457 million is currently outstanding).
  • Incremental capital to support global growth initiatives.
  • Payment of transaction fees and expenses.
• Covenants and Terms:
  • Governed by a trust indenture permitting additional note issuances subject to leverage covenants.
  • Allows for up to $100 million (U.S.) of senior bank financing.
  • Non-dilutive instrument.
• Closing Timeline: Expected to close on or about February 18, 2026, subject to customary closing requirements.
• Regulatory/Market Context:
  • Offered on a private placement basis in certain Canadian provinces/territories under prospectus exemptions.
  • Subject to a customary four-month hold period under Canadian securities laws.
  • CEO Boris Jordan noted the offering was "meaningfully oversubscribed" and ranked as the largest note offering in the U.S. cannabis industry to date.

Notable Quotes

• "Strong demand from both new and existing investors has delivered a meaningfully oversubscribed offering that refinances and surpasses our prior commitments, ranking this as the largest note offering in the U.S. cannabis industry to date. There are 10 first-time cannabis lenders committed in this transaction, which demonstrates the institutional investor confidence in the Curaleaf story buoyed by the exceptional marketing efforts of the placement agents led by Seaport Global Securities," said Boris Jordan, chairman and chief executive officer of Curaleaf.
• "This transaction strengthens our balance sheet, extends maturities to 2029 and provides ample flexibility to pursue high-return global growth opportunities, reinforced by our robust and consistent cash generation. With this strategic priority nearing completion, we are well positioned to execute on our long-term growth strategies with strong institutional backing."