Snap talks $1 billion seven-year convertible notes at 0.75%-1.25%, up 37.5%-42.5%

By Abigail W. Adams

Portland, Me., Aug. 6 – Snap Inc. plans to price $1 billion of seven-year convertible notes after the market close on Tuesday with price talk for a coupon of 0.75% to 1.25% and an initial conversion premium of 37.5% to 42.5%, according to a market source.

Morgan Stanley & Co. LLC is lead bookrunner for the Rule 144A deal, which carries a greenshoe of $150 million.

Goldman Sachs & Co. LLC and J.P. Morgan Securities LLC are also joint bookrunners.

The notes are non-callable for four years and then subject to a 130% hurdle with a make-whole.

In connection with the pricing of the notes, Snap will enter into capped call transactions.

Proceeds will be used to cover the cost of the call spread and for general corporate purposes, which may include the acquisition of complementary businesses, products or technologies and the repurchase of stock.

Snap is a Santa Monica, Calif.-based American technology and camera company.

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