Snap Announces Proposed Private Offering of $1.0 Billion of Convertible Senior Notes Due 2027

Snap Inc. (NYSE: SNAP) announced today that it intends to offer, subject to market conditions and other factors, $1.0 billion aggregate principal amount of convertible senior notes due 2027 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 $150.0 million aggregate principal amount of notes.

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

The notes will mature on May 1, 2027, 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, 2027 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’s Class A common stock, or a combination of cash and shares of Snap’s 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 for general corporate purposes, including working capital, operating expenses, capital expenditures, and to pay the cost of the capped call transactions described below. Snap may also use a portion of the net proceeds to acquire complementary businesses, products, services, or technologies or for repurchases of Snap’s securities.

The notes and any shares of Snap Class A common stock issuable on conversion of the notes have not been registered under the Securities Act or any state securities laws. Unless a subsequent sale is registered under the Securities Act, the notes and shares of Snap Class A common stock issuable on conversion of the notes may only be offered or sold in the United States in a transaction that is exempt from or in a transaction not subject to, the registration requirements of the Securities Act and other applicable securities laws.