Snowflake Prices Private Placement of $2.0 Billion of Convertible Senior Notes
Snowflake Inc. (NYSE: SNOW) has priced a private placement of $2.0 billion in Convertible Senior Notes, split equally between 0% notes due 2027 and 2029. The company expects net proceeds of approximately $1.97 billion, which will be used to:
1. Pay for capped call transactions
2. Repurchase about $400 million of its Class A common stock
3. Fund general corporate purposes
The notes will be convertible to cash, Snowflake common stock, or a combination, at an initial conversion rate of 6.3492 shares per $1,000 principal (equivalent to $157.50 per share, a 40% premium). Snowflake also entered into capped call transactions to reduce potential dilution and offset cash payments above the principal amount upon conversion.
Snowflake Inc. (NYSE: SNOW) ha annunciato un collocamento privato di 2,0 miliardi di dollari in Note Convertibili di Tipo Senior, suddiviso equamente tra note allo 0% con scadenza nel 2027 e nel 2029. L'azienda prevede di ottenere proventi netti di circa 1,97 miliardi di dollari, che saranno utilizzati per:
1. Pagare per transazioni di capped call
2. Riacquistare circa 400 milioni di dollari delle proprie azioni ordinarie di Classe A
3. Finanziarie scopi aziendali generali
Le note saranno convertibili in contante, in azioni comuni di Snowflake, o in una combinazione, a un tasso di conversione iniziale di 6,3492 azioni per 1.000 dollari di capitale (equivalente a 157,50 dollari per azione, un premio del 40%). Snowflake ha anche avviato transazioni di capped call per ridurre la possibile diluizione e compensare i pagamenti in contante superiori all'importo principale al momento della conversione.
Snowflake Inc. (NYSE: SNOW) ha establecido un placement privado de $2.0 mil millones en Notas Senior Convertibles, divididas por igual entre notas al 0% con vencimiento en 2027 y 2029. La compañía espera ingresos netos de aproximadamente $1.97 mil millones, que se utilizarán para:
1. Pagar transacciones de capped call
2. Recomprar alrededor de $400 millones de sus acciones ordinarias Clase A
3. Financiar propósitos corporativos generales
Las notas serán convertibles a efectivo, acciones comunes de Snowflake, o una combinación de ambos, a una tasa de conversión inicial de 6.3492 acciones por $1,000 de capital (equivalente a $157.50 por acción, un 40% de prima). Snowflake también entró en transacciones de capped call para reducir la posible dilución y compensar los pagos en efectivo que superan el monto principal al momento de la conversión.
Snowflake Inc. (NYSE: SNOW)는 20억 달러 규모의 전환 우선 채권을 사모로 발행했습니다. 이는 2027년 및 2029년 만기 0% 채권으로 동일하게 분할되었습니다. 회사는 약 19.7억 달러의 순이익이 발생할 것으로 기대하고 있으며, 이는 다음과 같은 용도로 사용될 예정입니다:
1. 캡콜 거래 비용 지급
2. 약 4억 달러 상당의 A등급 보통주 재매입
3. 일반 기업 목적 자금 지원
채권은 현금, Snowflake 보통주 또는 두 가지 조합으로 전환 가능하며, 초기 전환 비율은 1,000달러 당 6.3492주입니다 (주당 157.50달러, 40% 프리미엄에 해당). Snowflake는 전환 시 주요 금액을 초과하는 현금 지급을 상쇄하고 잠재적 희석을 줄이기 위해 캡콜 거래를 시작했습니다.
Snowflake Inc. (NYSE: SNOW) a annoncé un placement privé de 2,0 milliards de dollars sous forme de Billets Convertibles Seniors, répartis également entre des billets à 0% arrivant à échéance en 2027 et 2029. La société prévoit des produits nets d'environ 1,97 milliard de dollars, qui seront utilisés pour :
1. Payer des transactions de capped call
2. Racheter environ 400 millions de dollars de ses actions ordinaires de Classe A
3. Financer des objectifs corporatifs généraux
Les billets seront convertibles en espèces, en actions ordinaires de Snowflake, ou en une combinaison de ces deux options, à un taux de conversion initial de 6,3492 actions pour 1 000 dollars de principal (équivalent à 157,50 dollars par action, avec une prime de 40%). Snowflake a également engagé des transactions de capped call pour réduire la dilution potentielle et compenser les paiements en espèces dépassant le montant principal lors de la conversion.
Snowflake Inc. (NYSE: SNOW) hat eine Privatplatzierung von 2,0 Milliarden Dollar in wandelbaren vorrangigen Anleihen zu einem Zinssatz von 0% bekannt gegeben, die gleichmäßig auf Anleihen mit Fälligkeit 2027 und 2029 verteilt sind. Das Unternehmen erwartet Nettoerlöse von etwa 1,97 Milliarden Dollar, die für folgende Zwecke verwendet werden:
1. Zahlung von capped call-Transaktionen
2. Rückkauf von etwa 400 Millionen Dollar seiner Klasse A Stammaktien
3. Finanzierung allgemeiner Unternehmensziele
Die Anleihen werden in Bargeld, Snowflake-Stammaktien oder eine Kombination von beidem umwandelbar sein, bei einem anfänglichen Umwandlungsverhältnis von 6,3492 Aktien pro 1.000 Dollar Nennwert (entspricht 157,50 Dollar pro Aktie, eine Prämie von 40%). Snowflake hat auch capped call-Transaktionen initiiert, um mögliche Verwässerungen zu verringern und Barzahlungen über dem Nennbetrag bei Umwandlung auszugleichen.
- Raised $2.0 billion through Convertible Senior Notes offering
- Entered into capped call transactions to mitigate potential dilution
- Plans to repurchase $400 million of Class A common stock
- Notes priced at a 40% premium to current stock price
- Potential dilution for existing shareholders if notes are converted to stock
- Increased debt liability on the balance sheet
Insights
Snowflake's
Key points:
- Net proceeds of ~
$1.97 billion (potentially$2.27 billion with options) $400 million for share repurchases, potentially supporting stock price- Capped call transactions to mitigate dilution, with a
100% premium cap price - Flexible use of funds for general corporate purposes, including potential acquisitions
This move strengthens Snowflake's balance sheet and provides financial flexibility for growth initiatives. The stock repurchase component may help offset potential negative market reactions to the offering. Overall, this appears to be a strategic financial maneuver to capitalize on favorable market conditions and support long-term growth objectives.
This offering reflects Snowflake's strong market position in the AI and cloud data space. The company's ability to raise
Market implications:
- Validates Snowflake's competitive position in the AI Data Cloud market
- Suggests potential for strategic acquisitions or investments in complementary technologies
- May signal increased competition and consolidation in the cloud data industry
- Could pressure competitors to seek similar financial arrangements or strategic moves
The capped call transactions and share repurchases demonstrate management's focus on balancing growth with shareholder value. This financial strategy positions Snowflake to capitalize on market opportunities while maintaining financial flexibility, potentially strengthening its competitive stance in the rapidly evolving AI and cloud data landscape.
No-Headquarters/
Snowflake also granted the initial purchasers of the notes options to purchase, within a 13-day period beginning on, and including, the date on which the notes are first issued, up to an additional
The notes will be general unsecured obligations of Snowflake and will not bear regular interest, and the principal amount of the notes will not accrete. The 2027 notes will mature on October 1, 2027 and the 2029 notes will mature on October 1, 2029, in each case, unless earlier converted, redeemed or repurchased.
Snowflake estimates that the net proceeds from the offering will be approximately
Snowflake expects to use the net proceeds from the offering to pay the cost of the capped call transactions described below, to repurchase approximately
Additional Details for the Convertible Senior Notes
The notes will be convertible at the option of the holders in certain circumstances. Upon conversion, Snowflake will pay or deliver, as the case may be, cash, shares of Snowflake’s common stock, or a combination of cash and shares of Snowflake’s common stock, at its election. The conversion rate for the 2027 notes will initially be 6.3492 shares of Snowflake’s common stock per
Snowflake may not redeem the 2027 notes prior to April 6, 2026 and Snowflake may not redeem the 2029 notes prior to October 6, 2027. Snowflake may redeem for cash all or any portion of the 2027 notes (subject to a partial redemption limitation), at its option, on or after April 6, 2026 if the last reported sale price of Snowflake’s common stock has been at least
If Snowflake undergoes a “fundamental change” (as defined in the indenture that will govern the applicable series of notes) prior to the maturity date of a series of notes, then, subject to certain conditions and limited exceptions, holders of the relevant series of notes may require Snowflake to repurchase for cash all or any portion of their notes of such series at a fundamental change repurchase price equal to
Capped Call Transactions and Concurrent Stock Repurchases
In connection with the pricing of the notes, Snowflake entered into privately negotiated capped call transactions relating to each series of notes with certain of the initial purchasers or affiliates thereof and other financial institutions (the “option counterparties”). The capped call transactions relating to the 2027 notes cover, subject to customary adjustments substantially similar to those applicable to the 2027 notes, the number of shares of common stock initially underlying the 2027 notes, and the capped call transactions relating to the 2029 notes cover, subject to customary adjustments substantially similar to those applicable to the 2029 notes, the number of shares of common stock initially underlying the 2029 notes. The capped call transactions relating to each series of notes are generally expected to reduce the potential dilution to Snowflake’s common stock upon any conversion of the relevant series of notes and/or offset any cash payments Snowflake is required to make in excess of the principal amount of converted notes of such series, as the case may be, with such reduction and/or offset subject to a cap. The cap price of the capped call transactions will initially be
In connection with establishing their initial hedges of the capped call transactions, Snowflake expects the option counterparties or their respective affiliates will enter into various derivative transactions with respect to Snowflake’s common stock and/or purchase shares of Snowflake’s common stock concurrently with or shortly after the pricing of the notes, including with, or from, certain investors in the notes. This activity could increase (or reduce the size of any decrease in) the market price of Snowflake’s common stock or the notes at that time.
In addition, the option counterparties or their respective affiliates may modify their hedge positions by entering into or unwinding various derivatives with respect to Snowflake’s common stock and/or purchasing or selling shares of common stock or other securities of Snowflake in secondary market transactions following the pricing of the notes and prior to the maturity of each series of notes (and are likely to do so during any observation period related to a conversion of the notes or, to the extent Snowflake exercises the relevant election under the capped call transactions, following any repurchase or redemption of the notes). This activity could also cause or avoid an increase or a decrease in the market price of Snowflake’s common stock or the notes, which could affect a noteholder’s ability to convert its notes and, to the extent the activity occurs during any observation period related to a conversion of notes, it could affect the number of shares, if any, and value of the consideration that a noteholder will receive upon conversion of its notes.
Snowflake expects to use approximately
The capped call transactions and the stock repurchases could have increased (or reduced the size of any decrease in) the market price of Snowflake’s common stock, which could have affected the trading price of the notes and could have resulted in a higher initial conversion price for the relevant series of notes. This press release is not an offer to repurchase Snowflake’s common stock, and the offering of the notes is not contingent upon the repurchase of Snowflake’s common stock.
The notes and any shares of Snowflake’s common stock issuable upon conversion of the notes have not been and will not be registered under the Securities Act, any state securities laws or the securities laws of any other jurisdiction, and unless so registered, may not be offered or sold in
This press release is neither an offer to sell nor a solicitation of an offer to buy any of these securities nor shall there be any sale of these securities in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful prior to the registration or qualification thereof under the securities laws of any such state or jurisdiction.
Forward-Looking Statements
This press release contains “forward-looking” statements within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended, including statements regarding, among other things, the offering, including statements concerning the expected closing of the offering of the notes, the capped call transactions and the stock repurchases, the anticipated use of proceeds from the proposed offering, the timing or amount of any additional repurchases of shares of our common stock following this offering, and the potential impact of the foregoing or related transactions on dilution to holders of our common stock and the market price of our common stock, the trading price of each series of notes or the conversion price of each series of notes. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual events, results or outcomes to differ materially from those expressed or implied by the forward-looking statements. These risks include, but are not limited to, market risks, trends and conditions, our ability to complete the proposed offering on the expected terms, or at all, whether we will be able to satisfy closing conditions related to the proposed offering and unanticipated uses of capital, any of which could differ or change based upon market conditions or for other reasons, and those risks included in the section titled “Risk Factors” in our Securities and Exchange Commission (“SEC”) filings and reports, including our Quarterly Report on Form 10-Q for the fiscal quarter ended July 31, 2024 and other filings that we make from time to time with the SEC, which are available on the SEC’s website at www.sec.gov. All forward-looking statements contained in this press release speak only as of the date on which they were made. Except as required by law, we undertake no obligation to update such forward-looking statements to reflect events that occur or circumstances that exist after the date on which they were made.
About Snowflake
Snowflake makes enterprise AI easy, efficient and trusted. Thousands of companies around the globe, including hundreds of the world’s largest, use Snowflake’s AI Data Cloud to share data, build applications, and power their business with AI. The era of enterprise AI is here.
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Investor Contact:
Jimmy Sexton
Investor Relations
IR@snowflake.com
Press Contact:
Eszter Szikora
Press@snowflake.com
Source: Snowflake Inc.
FAQ
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