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Snowflake Announces Proposed Private Placement of $3.5 Billion of 0.00% Convertible Senior Notes

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  • Snowflake intends to offer $1.3 billion of 0.00% Convertible Senior Notes due 2029 and $2.2 billion of 0.00% Convertible Senior Notes due 2031 in a private placement to qualified institutional buyers.
  • Initial purchasers have options to buy up to an additional $200 million of the 2029 notes and $300 million of the 2031 notes within 13 days of issuance.
  • The notes are general unsecured obligations with no regular interest, maturing on October 15, 2029, and October 15, 2031, with conversion terms to be determined at pricing.
  • Upon conversion, Snowflake may pay cash, deliver common stock shares, or provide a combination of both at its election.
  • Net proceeds will be used to pay for capped call transactions, repurchase a portion of existing 2027 notes, and fund general corporate purposes including stock repurchases, acquisitions, or strategic investments.
  • Capped call transactions are expected to reduce potential dilution from note conversions and offset cash payments exceeding principal amounts, subject to a cap.
  • Option counterparties may enter derivative transactions or purchase shares concurrently with pricing, which could increase or reduce the market price of Snowflake's common stock or notes.
  • Counterparties may modify hedge positions via secondary market transactions, potentially affecting the market price of the stock or notes and impacting noteholder conversion values.
  • Snowflake expects to repurchase a portion of its 2027 notes in privately negotiated transactions concurrent with the offering, with terms dependent on market prices at that time.
  • Hedged holders of repurchased 2027 notes may unwind positions by buying stock or derivatives, which could increase the stock price and raise the effective conversion price of the new notes.
  • The notes and underlying shares are unregistered under the Securities Act and cannot be offered or sold in the U.S. without registration or an applicable exemption.