Snap Announces Proposed Private Offering of $650 Million of Convertible Senior Notes Due 2030

Snap Inc. (NYSE: SNAP) announced today that it intends to offer, subject to market conditions and other factors, $650 million aggregate principal amount of convertible senior notes due 2030 in a private placement to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended, or the Securities Act. Snap also intends to grant the initial purchasers of the notes an option to purchase up to an additional $100 million aggregate principal amount of notes.

The notes will be general unsecured obligations of Snap and will accrue interest payable semi-annually in arrears.

The notes will mature on May 1, 2030, 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 prior to the close of business on the business day immediately preceding February 1, 2030 only on the satisfaction of certain conditions and during certain periods. After that, the notes will be convertible at the option of the holders at any time until the close of business on the business day immediately preceding the maturity date. On conversion, Snap will elect to settle the notes in cash, shares of Snap Class A common stock, or a combination of cash and shares of Snap Class A common stock. The interest rate, initial conversion rate, and other terms of the notes will be determined at the time of pricing of the offering.

Snap intends to use the net proceeds from the offering to repurchase a portion of its outstanding convertible senior notes due 2025 and/or convertible senior notes due 2026, for general corporate purposes, including working capital, operating expenses, capital expenditures, acquisitions of complementary businesses, or other repurchases of Snap’s securities, and to pay the cost of the capped call transactions described below.

In addition, Snap expects that some or all of the holders of its convertible senior notes due 2025 and/or convertible senior notes due 2026 that it repurchases may purchase shares of Snap Class A common stock in open market transactions or enter into or unwind various derivatives with respect to Snap Class A common stock to unwind hedge positions that they have with respect to their investment in its convertible senior notes due 2025 and/or convertible senior notes due 2026. These transactions, in turn, may place upward pressure on the trading price of Snap Class A common stock, causing Snap Class A common stock to trade at higher prices than would be the case in the absence of these purchases.