Corporate Finance

Granite Construction settles 2028 convertible-note conversions with cash and shares

Granite Construction paid approximately $715 million in cash and issued 662,383 common shares on August 12, 2026, to settle obligations related to conversions of its 3.75% Convertible Senior Notes due 2028.

By Carter Hayes ยท

Key takeaways

  • Granite Construction issued 662,383 common shares to settle conversions of $273.7 million aggregate principal amount of its 3.75% Convertible Senior Notes due 2028.
  • The company paid approximately $715 million in cash on August 12, 2026, including cash paid in lieu of fractional shares.
  • Financial institutions paid Granite approximately $148 million on August 11, 2026, under agreements terminating capped-call transactions associated with the 2028 notes.
  • Granite said cash proceeds from the capped-call termination settlements funded part of its cash payment.

Cash and shares used in conversion settlement

Granite Construction Incorporated reported that it issued 662,383 shares of common stock on August 12, 2026, to settle conversions of $273.7 million aggregate principal amount of its outstanding 3.75% Convertible Senior Notes due 2028.

On the same date, the company paid approximately $715 million in cash, including cash paid in lieu of fractional shares. Granite said the cash payment and share issuance settled obligations for notes submitted for conversion in connection with the notes' redemption.

The shares were issued under a registration exemption for exchanges of securities of the same issuer with existing security holders.

Capped-call agreements were terminated before settlement

Granite had called the outstanding $273.7 million aggregate principal amount of the 2028 notes on May 19, 2026, for redemption on August 10, 2026.

On August 4, Granite entered into agreements with certain financial institutions to fully unwind and terminate capped-call transactions that had been entered into in connection with the 2028-note offering.

Under those agreements, the counterparties paid Granite approximately $148 million in aggregate on August 11, 2026. The company said these proceeds funded part of the approximately $715 million cash payment made the following day.

Transaction timeline

Granite entered into the capped-call unwind agreements on August 4, 2026. The counterparties made their approximately $148 million payment on August 11.

On August 12, Granite made its cash payment and issued common shares in settlement of conversion-related obligations for the notes. The company filed its current report on August 13, 2026.