Square, Inc. Announces $1.0 Billion Convertible Notes Offering
09 Novembre 2020 - 1:25PM
Business Wire
Square, Inc. (“Square”) (NYSE: SQ) today announced its intention
to offer, subject to market conditions and other factors, $500
million aggregate principal amount of convertible senior notes due
May 1, 2026 (the “2026 Notes”) and $500 million aggregate principal
amount of convertible senior notes due November 1, 2027 (the “2027
Notes” and, together with the 2026 Notes, the “Notes”) in a private
placement to qualified institutional buyers pursuant to Rule 144A
under the Securities Act of 1933, as amended (the “Act”). Square
also expects to grant the initial purchasers of the Notes a 30-day
option to purchase up to an additional $75 million aggregate
principal amount of 2026 Notes and up to an additional $75 million
aggregate principal amount of 2027 Notes, in each case, solely to
cover over-allotments, if any.
The Notes will be senior, unsecured obligations of Square, and
interest will be payable semi-annually in arrears. The Notes will
be convertible into cash, shares of Square’s Class A common stock
(“Class A common stock”), or a combination thereof, at Square’s
election. The interest rate, conversion rate, and other terms of
the Notes are to be determined upon pricing of the offering.
In connection with the pricing of the Notes, Square expects to
enter into privately negotiated convertible note hedge transactions
with one or more of the initial purchasers or their affiliates
and/or other financial institutions (the “hedge counterparties”).
The convertible note hedge transactions are expected generally to
reduce the potential dilution to the Class A common stock upon any
conversion of the Notes and/or offset the cash payments Square is
required to make in excess of the principal amount of converted
Notes, as the case may be, in the event that the market price of
the Class A common stock is greater than the strike price of those
convertible note hedge transactions. Square also expects to enter
into privately negotiated warrant transactions with the hedge
counterparties. The warrant transactions could separately have a
dilutive effect to the extent the market value per share of Class A
common stock exceeds the strike price of any warrant transactions,
unless Square elects, subject to certain conditions set forth in
the related warrant confirmations, to settle the warrant
transactions in cash. If the initial purchasers exercise their
over-allotment options to purchase additional Notes, Square intends
to enter into additional convertible note hedge transactions and
additional warrant transactions with the hedge counterparties.
Square expects that, in connection with establishing their
initial hedge of the convertible note hedge transactions and
warrant transactions, the hedge counterparties or their respective
affiliates may purchase shares of the Class A common stock and/or
enter into various derivative transactions with respect to the
Class A common stock concurrently with, or shortly after, the
pricing of the Notes. These activities could increase (or reduce
the size of any decrease in) the market price of the Class A common
stock or the Notes at that time. In addition, Square expects that
the hedge counterparties or their respective affiliates may modify
their hedge positions by entering into or unwinding derivative
transactions with respect to the Class A common stock and/or by
purchasing or selling shares of the Class A common stock or other
securities of Square in secondary market transactions following the
pricing of the Notes and prior to the maturity date of the relevant
Notes (and are likely to do so during any observation period
relating to a conversion of the Notes or in connection with any
repurchase of Notes by Square). This activity could also cause or
avoid an increase or a decrease in the market price of the Class A
common stock or the Notes, which could affect the ability of
noteholders to convert the Notes and, to the extent the activity
occurs during any observation period related to a conversion of the
Notes, could affect the amount and value of the consideration that
noteholders will receive upon conversion of the Notes.
Square expects to use a portion of the net proceeds of the
offering of the Notes to pay the cost of the convertible note hedge
transactions described above (after such cost is partially offset
by the proceeds to Square of the warrant transactions described
above) and to use the remaining proceeds of the offering for
general corporate purposes.
This announcement is neither an offer to sell nor a solicitation
of an offer to buy any of these securities and shall not constitute
an offer, solicitation, or sale in any jurisdiction in which such
offer, solicitation, or sale is unlawful. The Notes and the shares
of Class A common stock issuable upon conversion of the Notes, if
any, have not been, and will not be, registered under the Act or
the securities laws of any other jurisdiction, and unless so
registered, may not be offered or sold in the United States except
pursuant to an applicable exemption from the registration
requirements of the Act and applicable state laws.
About Square, Inc.
Square, Inc. (NYSE: SQ) builds tools to empower businesses and
individuals to participate in the economy. Sellers use Square to
reach buyers online and in-person, manage their business, and
access financing. And individuals use Cash App to spend, send,
store, and invest money. Square has offices in the United States,
Canada, Japan, Australia, Ireland, Spain, and the UK.
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version on businesswire.com: https://www.businesswire.com/news/home/20201109005576/en/
Media Contact: press@squareup.com or Investor
Relations Contact: ir@squareup.com
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