Snap talks $1.25 billion six-year convertible notes to yield 0.125%-0.625%, up 45%-50%

By Abigail W. Adams

Portland, Me., Feb. 8 – Snap Inc. plans to price $1.25 billion of six-year convertible notes after the market close on Tuesday with price talk for a coupon of 0.125% to 0.625% and an initial conversion premium of 45% to 50%, according to a market source.

Goldman Sachs & Co. LLC and J.P. Morgan Securities LLC are bookrunners for the Rule 144A offering, which carries a greenshoe of $200 million.

The notes are non-callable for three years and then subject to a 130% hurdle.

They will be settled in cash, shares or a combination of both at the company’s option.

In connection with the offering, the company 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 acquisitions or strategic investments.

Snap is a Santa Monica, Calif.-based camera and social media company.

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