Twitter Inc. plans to offer $1 billion of convertible senior notes due in 2024 in a private placement.
The company said June 6 that it expects to grant the initial purchasers of the notes a 30-day option to buy up to an additional $150 million of the notes, to cover any overallotments. The notes will be unsecured, senior obligations of Twitter and interest will be payable semiannually in arrears.
The notes will be convertible into cash, shares of Twitter's common stock or a combination of those.
In connection with the pricing of the notes, Twitter expects to enter into privately negotiated convertible note hedge transactions with one or more of the initial purchasers or their affiliates or other financial institutions. Twitter also expects to enter into privately negotiated warrant transactions with the hedge counterparties.
The company expects to use a portion of the net proceeds to pay the cost of the convertible note hedge transactions and to use the remaining proceeds for general corporate purposes, which may include the payment of amounts due upon conversion at maturity or upon repurchase of its 0.25% convertible senior notes due 2019.
