By Abigail W. Adams
Portland, Me., Feb. 9 – Snap Inc. priced an upsized $1.3 billion of six-year convertible notes after the market close on Tuesday at par at the rich end of talk with a coupon of 0.125% and an initial conversion premium of 50%, according to a company news release and a market source.
Price talk was for a coupon of 0.125% to 0.625% and an initial conversion premium of 45% to 50%, according to a market source.
Goldman Sachs & Co. LLC and J.P. Morgan Securities LLC were bookrunners for the Rule 144A offering, which carries a greenshoe of $200 million.
The initial size of the offering was $1.25 billion. The greenshoe was not upsized.
The notes are non-callable until March 5, 2025 and then subject to a 130% hurdle.
They are putable upon a fundamental change.
The notes will be settled in cash, shares or a combination of both at the company’s option.
In connection with the offering, the company entered into capped call transactions with a cap price of $93.90, which represents a premium of 150% over the last reported price of stock.
Net proceeds are expected to be $1,284,500,000 or will be $1,482,300,000 if the greenshoe is exercised in full.
Approximately $153.4 million will be used to cover the cost of the call spread with the remaining amount to be used for general corporate purposes, which may include acquisitions or strategic investments.
Snap is a Santa Monica, Calif.-based camera and social media company.
| Issuer: | Snap Inc.
|
| Amount: | $1.3 billion
|
| Greenshoe: | $200 million
|
| Issue: | Convertible senior notes
|
| Maturity: | March 1, 2028
|
| Bookrunners: | Goldman Sachs & Co. LLC and J.P. Morgan Securities LLC
|
| Coupon: | 0.125%
|
| Price: | Par
|
| Yield: | 0.125%
|
| Conversion premium: | 50%
|
| Conversion price: | $56.34
|
| Conversion rate: | 17.7494
|
| Call options: | Non-callable until March 5, 2025 and then subject to a 130% hurdle
|
| Put options: | Upon a fundamental change
|
| Pricing date: | Feb. 8
|
| Settlement date: | Feb. 11
|
| Distribution: | Rule 144A
|
| Talk: | Coupon of 0.125% to 0.625% and initial conversion premium of 45% to 50%
|
| Stock symbol: | NYSE: SNAP
|
| Stock price: | $37.56 at market close Feb. 8
|
| Market capitalization: | $61.01 billion
|
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