Square Announces $1 Billion Convertible Notes Offering Pricing

Payments platform Square recently announced the pricing of $1.0 billion aggregate principal amount of convertible senior notes due 2025 in a private placement to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933.

Square revealed that the notes will be senior, unsecured obligations and will bear interest at a rate of 0.125% per year. Interest will be payable semi-annually in arrears on March 1 and September 1 of each year, beginning on September 1, 2020. The notes will mature on March 1, 2025, unless earlier repurchased or converted. The platform also confirmed:

“Square expects to use approximately $49.7 million of the net proceeds of the offering of the Notes to pay the cost of the convertible note hedge transactions described below, after such cost is partially offset by the proceeds of the warrant transactions described below, to raise the effective conversion price of the Notes from Square’s perspective, and to use the remaining proceeds of the offering for general corporate purposes.”

Square further added that the initial conversion rate for the Notes is 8.2641 shares of Square’s Class A common stock per $1,000 principal amount of notes, which is equivalent to an initial conversion price of approximately $121.01 per share. Prior to the close of business on the business day immediately preceding December 1, 2024, the Notes will be convertible at the option of the noteholders only upon the satisfaction of specified conditions and during certain periods.

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