By SoFi Technologies saw its shares decrease by 10% to $7.74 following the announcement of its plans to offer $750 million of convertible senior notes due in 2029 through a private offering.
Offering Details
The company will grant initial purchasers of the notes an option to acquire an additional $112.5 million of notes within a 13-day period from the date of initial issuance.
The notes will be unsecured obligations of SoFi, accrue interest semi-annually, and mature on March 15, 2029. Note holders will have the ability to convert their notes under specific circumstances into cash and potentially shares of SoFi’s common stock.
Redemption and Terms
SoFi retains the right to redeem the notes, either in part or in full, for cash at its discretion anytime between March 15, 2027, and the 30th scheduled trading day before the maturity date. The interest rate, initial conversion rate, and additional terms will be established at the time of pricing.
Utilization of Proceeds
A portion of the proceeds from the offering will be used to cover costs associated with capped call transactions. The remaining net proceeds, along with available cash, will go towards paying fees, expenses related to the offering, redemption of its 12.5% Series 1 Preferred Stock, and SoFi for general corporate purposes, which could involve debt repayment.
SoFi’s move indicates strategic financial planning and realignment to enhance its financial position and operational capabilities.
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