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

Snap Inc. (NYSE: SNAP) announced today the pricing of $1.0 billion aggregate principal amount of 0% 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 granted the initial purchasers of the notes an option to purchase up to an additional $150.0 million aggregate principal amount of notes. The sale of the notes is expected to close on April 30, 2021, subject to customary closing conditions.

The notes will be general unsecured obligations of Snap. The notes will not bear interest and the principal amounts of the notes will not accrete.

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.

Snap may not redeem the notes prior to May 5, 2024. Snap may redeem all or any portion of the notes, at its option, for cash on or after May 5, 2024 if the last reported sale price of Snap Class A common stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive), including the trading day immediately before the date on which Snap provides notice of redemption, during any 30 consecutive trading day period ending on, and including, the trading day immediately before the date on which Snap provides notice of redemption at a redemption price equal to 100% of the principal amount of the notes to be redeemed.

On the occurrence of certain events that constitute a fundamental change (as defined in the indenture governing the notes), holders of the notes will have the right to require Snap to repurchase all or a portion of their notes for cash at a repurchase price equal to 100% of their principal amount. Under certain circumstances, Snap will also be required to increase the conversion rate for holders who convert their notes in connection with certain events, including any fundamental change, occurring prior to the maturity date or in connection with Snap’s issuance of a notice of redemption.