Ann: Presentation - Strategic Partnership and Long Term Funding, page-77

Interest payments are able to be capitalised by LTR in the first two years (or payable in equity issuance at prevailing market prices), so yes. After two years, it would appear payment in kind is also still possible. Note that the interest rate isn't exactly SOFR, it is SOFR grossed up for withholding taxes, which looks like 10% of the interest in $, so that it appears to be 1.1x SOFR or about 5.8%ish at the moment. Still quite low, but LGES is getting a long call option thrown in.

The economics of the note are a little tricky as there is a provision for the company to force conversion in the price reaches 1.3x $1.80, or $2.34 (closes above that level on 20 out of 30 consecutive trading days). The $1.80 can change due to things like rights issues and dividends, which is quite standard. Schedule 1 of the announcement has the details of the note.

So instead of having a A$550m bank loan on BBSW+up to 4%, it will keep its existing A$300m loan at BBSW+1.5% and tack on roughly A$379m convertible note, which will turn into equity if all goes well. Market seems pretty happy with the combination... at the very least it has removed refinancing risk for a while.