SoFi Technologies (NASDAQ: SOFI) stock rose over 1% on Wednesday after pricing its convertible senior notes offering, following a 15% decline the day before upon the initial announcement.
SoFi Technologies (SOFI) has revealed the details of its latest financial maneuver, disclosing the pricing for its private offering of 1.25% convertible senior notes due in 2029. The fintech company aims to secure a substantial $750 million through this initiative, targeting qualified institutional buyers. The settlement for this offering will occur on or around March 8, 2024.
These notes, slated to mature on March 15, 2029, will accrue interest semi-annually and possess the option for conversion into SoFi’s common stock contingent upon specific conditions. The conversion rate is initially fixed at around 105.8089 shares per $1,000 principal amount of notes, effectively setting the conversion price at around $9.45 per share.
SoFi has also granted the initial purchasers the option to procure an extra $112.5 million in notes within a 13-day window following the issue date. The company also retains the ability to redeem the notes for cash post-March 15, 2027, subject to certain conditions, while noteholders have the right to demand repurchase of the notes in particular scenarios.
SoFi expects net proceeds of about $735 million, which could soar to $845.3 million if the additional notes are fully secured. The company will allocate around $78.8 million from the proceeds to capped call transactions aimed at mitigating potential dilution resulting from the conversion of the notes. It will also allocate the remainder for various corporate endeavors, including redeeming its 12.5% Series 1 Preferred Stock and repaying higher-cost debts.
SoFi Technologies (NASDAQ: SOFI) Stock Performance
SOFI stock gained 1.38% to close at $7.37 on Wednesday. The traders had exchanged hands with 125,928,492 (125.92 million) shares compared to the average daily trading volume of 53.78 million.
Edward Cooke is a financial analyst, freelance writer, and editor. He has six years of experience in financial journalism. He has an in-depth understanding of equities markets, tracking major indices and providing real-time analysis on stock price movements, corporate earnings, and market sentiment.
