BKV issues $575 million of 1.625% convertible notes due 2031

BKV Corporation (NYSE: BKV) issued $575 million aggregate principal amount of 1.625% Convertible Senior Notes due 2031 on September 14, 2026, completing a financing that combines new debt, capped-call transactions and a concurrent common-stock repurchase. The issuance includes $75 million of notes from the initial purchasers' full exercise of their additional-purchase option, according to the company's Form 8-K (Form 8-K AccNo 0001104659-26-107535).

The issuance

The completed transaction generated approximately $554.7 million in net proceeds after initial purchasers' discounts and commissions and BKV's estimated offering expenses. The company used approximately $64.7 million for the capped calls and approximately $35 million to repurchase shares. It intends to use the remainder for general corporate purposes, including repayment of outstanding indebtedness and capital expenditures. The disclosed uses do not identify which specific debt will be repaid.

A concurrent share repurchase

BKV purchased 1,452,282 shares of its common stock in connection with the offering at $24.10 per share. That price was the stock's closing price on September 9, 2026, the financing's pricing date. The repurchase cost of approximately $35 million is a separate use of proceeds from the approximately $64.7 million cost of the capped-call transactions. Both amounts are distinct from the approximately $554.7 million in total net proceeds.

The dates matter to the transaction's status: September 9 was the pricing date, while September 14 was the issuance date. Although the initial purchasers had an option to acquire up to $75 million of additional principal for settlement within 13 days from and including the first issuance, the full option amount was already included in the $575 million issued on September 14.

Conversion terms and capped calls

The notes initially convert at a rate of 31.3161 shares of BKV common stock per $1,000 principal amount, equivalent to an initial conversion price of approximately $31.93 per share. BKV may elect to settle conversions in cash or a combination of cash and common shares. The indenture defines an observation period of 50 volume-weighted average price, or VWAP, trading days.

Before July 15, 2031, holders may convert only upon certain events. From that date, holders may elect to convert until the close of business on the second scheduled trading day immediately before maturity. These provisions make the timing and settlement terms relevant alongside the initial conversion price when assessing the notes' potential effect on common shareholders.

BKV entered the base capped-call transactions on September 9 and additional capped-call transactions on September 10 in connection with the purchaser option. Together, they cover the aggregate number of shares initially underlying the notes. The company expects the transactions generally to reduce potential dilution and/or offset potential cash payments above principal upon conversion. That expectation describes the purpose of the transactions rather than a guarantee that every conversion-related obligation will be offset.

The capped calls have an initial cap price of $48.20 per share, subject to adjustment. This represents a 100% premium over BKV's September 9 closing share price. The cap price and the notes' approximately $31.93 initial conversion price describe different transaction terms; the disclosed $48.20 figure is the capped-call cap price.

Interest, maturity and redemption

The notes bear interest at 1.625% per year, payable semiannually in arrears on April 15 and October 15, beginning April 15, 2027. They mature on October 15, 2031, unless earlier repurchased, redeemed or converted. The issuance is governed by a September 14 indenture between BKV and U.S. Bank Trust Company, National Association, as trustee.

BKV may provisionally redeem the notes, subject to limitations, starting October 15, 2029 and ending on the 50th scheduled trading day immediately before maturity. The notes must be freely tradable, and the last reported stock sale price must exceed 130% of the conversion price under specified trading-day tests. For a partial provisional redemption, at least $100 million in principal must remain outstanding after the amount called for redemption is deducted. These conditions limit when BKV can exercise that redemption option.

Filing and remaining detail

The notes were sold to initial purchasers under Section 4(a)(2) of the Securities Act and resold to qualified institutional buyers under Rule 144A. Neither the notes nor the conversion shares were registered under the Securities Act. BKV reported the transaction in Form 8-K under Items 1.01, 2.03 and 3.02, with the indenture and form of capped-call confirmation listed among its exhibits.

The financing establishes the issued debt amount, coupon, conversion terms and two specified uses of proceeds. The allocation of the remaining proceeds between debt repayment, capital expenditures and other general corporate purposes remains unspecified in the verified facts. Accordingly, the disclosed issuance supports an assessment of the financing structure, but does not establish a specific debt-repayment outcome.

Filing reference

BKV Corporation disclosed the convertible notes issuance in Form 8-K AccNo 0001104659-26-107535 (Items 8.01 and 9.01; earliest event and closing date September 14, 2026), with Exhibit 1.1 Underwriting Agreement dated September 9, 2026 and Exhibit 4.1 Officers’ Certificate dated September 14, 2026.