Snap Raises $988.3M Via Private Institutional Convertible Senior Debt

Snap Inc SNAP priced $1 billion 0% convertible senior notes due 2027 to raise $988.3 million in a secondary private institutional placement.
The initial note purchasers can purchase additional notes up to $150 million.
The notes will be redeemable after May 5, 2024, but only if the last reported sale price per share of Snap’s stock exceeds 130% of the conversion price for a specified period.
The initial conversion price of $89.25 represents a 47.5% premium to the April 27, 2021 closing price of $60.51.
Snap has entered into capped call transactions with certain financial institutions to offset the potential stock dilution from any note conversion. The capped call transactions’ initial cap price is $121.02, representing a 100% premium to the April 27, 2021 closing price.
Snap will form exchange agreements with certain holders of its 0.75% convertible senior notes due 2026 and its 0.25% convertible senior notes due 2025 to exchange $840 million of existing notes for 38.4 million shares.
Snap will utilize $75.5 million of the offering proceeds to pay for the capped call transactions. The remaining net proceeds for general corporate purposes, including working capital, operating expenses, and capital expenditures.
Snap held $2.2 billion in senior convertible notes and $0.97 billion in cash and equivalents as of March 31, 2021.
Price action: SNAP shares traded lower by 0.17% at $59.92 in the premarket session on the last check Wednesday.