Spotify Technology S.A. (NYSE: SPOT) disclosed Friday that its indirect unit, Spotify USA Inc. has declared the pricing of $1300.0 million exchangeable senior notes due 2026 in a private settlement to eligible institutional purchasers following Rule 144A under the Securities Act of 1933, as modified. Spotify is the guarantor of the offering.
The firm has set March 2, 2021, the date for the issuance and the sale of the notes dependent on certain conditions. The indirect unit of SPOT has also provided the opportunity to the initial purchasers for payment within 13 days from, plus, the date the notes are first published, up to an extra $200,000,000 principal amount of notes.
Furthermore, the notes will be senior, without collateral commitments of Spotify USA. The notes will not assume regular interest, and the principal sum of the notes will not increase. The maturity date of the notes is March 15, 2026, except if earlier bought, converted, or traded. Noteholders also have the option to exchange the notes before December 15, 2025, only depending on certain circumstances.
The Noteholders have the right to exchange their notes at any time at their election until the close of business on the second planned trading day just before the maturity date after and from December 15, 2025. Moreover, Spotify USA will resolve exchanges through the payment or providing, as appropriate, cash, ordinary shares of Spotify, or a mixture of cash and ordinary shares of Spotify, at Spotify USA’s election.
The firm has set the primary exchange rate (ER) of 1.9410 ordinary shares per $1,000 principal amount of notes. This ER signifies a starting exchange price (EP) of nearly $515.20 per ordinary share. The starting exchange price signifies a payment of nearly 70.0% over the last stated sale price of $303.06 per ordinary share of Spotify on February 25, 2021. The ER and EP will be dependent on the modification upon the happening of certain events.