On Thursday, Snap Inc. declared the pricing of $650 million convertible senior notes (0.50%) due 2030, intended to be privately placed. The organization plans to allocate the net proceeds towards the cost of the capped call transactions, the repurchase of its currently outstanding convertible senior notes due 2025 and 2026, and diverse corporate requirements.
The note sale is scheduled to be finalized on May 13. Concurrently, Snap granted the initial purchasers an option to buy an additional $100 million of notes. The company forecasts the net proceeds from the issuance will total approximately $641.6 million, or potentially around $740.4 million, provided the initial purchasers completely exercise their option to purchase the additional notes.
These notes will have an inaugural conversion rate of 45.0846 shares of Snap Class A common stock for each $1,000 principal amount of notes. This rate is commensurate with an initial conversion price of roughly $22.18 per share, signifying a premium of approximately 32.5 percent compared to the closing price of $16.74 per Class A share on the NYSE as of May 8.