Snap Inc. proposed a $1 billion offering of convertible senior notes due 2026 in a private placement.
The company also intends to grant the initial purchasers of the notes an option to purchase up to an additional $150 million principal amount of notes, according to an Aug. 6 news release. The notes will be general unsecured obligations of Snap and will accrue interest payable semiannually in arrears.
The notes will mature on Aug. 1, 2026, unless repurchased, redeemed or converted in accordance with their terms prior to the maturity date. The notes will be convertible at the option of the holders before the close of business on the business day immediately preceding May 1, 2026.
Snap plans to use the net proceeds for general corporate purposes, including working capital, operating expenses, capital expenditures and to pay the cost of the capped call transactions described below. Snap may also use a portion of the net proceeds to acquire complementary businesses, products, services or technologies or for repurchases of Snap's common stock.
In connection with the pricing of the notes, Snap plans to enter into capped call transactions with one or more of the initial purchasers of the notes or their respective affiliates or other financial institutions.