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Twitter prices $1B convertible notes offering

Twitter Inc. plans to sell $1 billion in 0.25% convertible senior notes due 2024 in a private placement to institutional buyers.

The notes will be convertible into cash, shares of Twitter's common stock or a combination of those. Twitter expects to receive about $989.0 million in net proceeds from the note sale, which is expected to settle on June 11. The company expects to use $70.6 million of the proceeds on expenses related to the convertible notes, but the majority will be earmarked 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.

Initial purchasers of the notes have a 30-day option to purchase up to an additional $150.0 million to cover any overallotments.

The notes will be senior, unsecured obligations of Twitter and will bear interest at a rate of 0.25% per year. Interest will be payable semiannually in arrears on June 15 and Dec. 15 of each year, beginning on Dec. 15, 2018. The notes will mature on June 15, 2024, unless earlier repurchased or converted.

The initial conversion rate for the notes is 17.5001 shares of common stock per $1,000 principal amount of notes, which the company said is equivalent to about $57.14 per share. Prior to the close of business on the business day immediately preceding March 15, 2024, the notes will be convertible at the option of the noteholders only upon the satisfaction of specified conditions and during certain periods.