Snap Announces Proposed Private Offering of $700 Million of Senior Notes Due 2033

Business Wire 10-Feb-2025 7:02 AM

Snap Inc. (NYSE:SNAP) announced today that it intends to offer, subject to market conditions and other factors, $700 million aggregate principal amount of senior notes due 2033, or the notes, in a private offering that is exempt from the registration requirements of the Securities Act of 1933, as amended, or the Securities Act. The notes will be general and unsecured senior obligations of Snap and will be fully and unconditionally guaranteed in the future, jointly and severally, by each of Snap's domestic subsidiaries that guarantees certain of its other indebtedness, if any, subject to certain exceptions.

Snap intends to use the net proceeds from the offering, together with cash on hand, to repurchase a portion of some or all of its outstanding convertible senior notes due 2025, or the 2025 notes, its outstanding convertible senior notes due 2026, or the 2026 notes, its outstanding convertible senior notes due 2027, or the 2027 notes, and/or its outstanding convertible senior notes due 2028, or the 2028 notes, and any remaining net proceeds from the offering for general corporate purposes, including working capital, operating expenses, capital expenditures, acquisitions of complementary businesses, or other repurchases of Snap's securities.

In addition, Snap expects that some or all of the holders of the 2025 notes, the 2026 notes, the 2027 notes, or the 2028 notes that it repurchases may purchase shares of Snap Class A common stock in open market transactions or enter into or unwind various derivatives with respect to Snap Class A common stock to unwind hedge positions that they have with respect to their investment in the 2025 notes, the 2026 notes, the 2027 notes, or the 2028 notes. These transactions, in turn, may place upward pressure on the trading price of Snap Class A common stock, causing Snap Class A common stock to trade at higher prices than would be the case in the absence of these purchases.

The notes have not been and will not be registered under the Securities Act or any state securities laws. The notes will only be offered or sold to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A promulgated under the Securities Act, and outside the United States to non-U.S. persons pursuant to Regulation S under the Securities Act.

In connection with the issuance of the 2026 notes, Snap entered into capped call transactions with certain financial institutions. If Snap repurchases any of the 2026 notes, it may enter into agreements with the existing option counterparties to terminate a portion of the existing capped call transactions. In connection with the termination of any of these transactions, Snap expects the existing option counterparties or their respective affiliates to sell shares of Snap Class A common stock or unwind various derivatives to unwind their hedge in connection with those transactions. This activity could decrease (or reduce the size of any increase in) the market price of Snap Class A common stock at that time. In connection with the termination of the existing option transactions, Snap will receive payments in amounts that depend in part on the market price of Snap Class A common stock over a valuation period following the pricing of the notes.

This press release is not an offer to sell and is not soliciting an offer to buy any securities, nor will it constitute an offer, solicitation, or sale of the securities in any state or jurisdiction in which such offer, solicitation, or sale would be unlawful prior to the registration or qualification under the securities laws of any such state or jurisdiction. Any offers of the notes will be made only by means of a private offering memorandum.

About Snap Inc.

Snap Inc. is a technology company. We believe the camera presents the greatest opportunity to improve the way people live and communicate. We contribute to human progress by empowering people to express themselves, live in the moment, learn about the world, and have fun together.

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, about Snap and Snap's industry that involve substantial risks and uncertainties. All statements other than statements of historical facts contained in this press release, including statements regarding the proposed terms of the notes, the completion, timing, and size of the proposed offering of the notes, the anticipated use of the net proceeds from the proposed offering of the notes, the expected repurchases of the 2025 notes, the 2026 notes, the 2027 notes, and/or the 2028 notes, and effects thereof, and any potential termination of a portion of the capped call transactions in connection with the expected repurchases of the 2026 notes, are forward-looking statements. In some cases, you can identify forward-looking statements because they contain words such as "anticipate," "believe," "contemplate," "continue," "could," "estimate," "expect," "going to," "intend," "may," "plan," "potential," "predict," "project," "should," "target," "will," or "would" or the negative of these words or other similar terms or expressions. Snap cautions you that the foregoing may not include all of the forward-looking statements made in this press release.

You should not rely on forward-looking statements as predictions of future events. Snap has based the forward-looking statements contained in this press release primarily on its current expectations and projections about future events and trends, including its financial outlook, macroeconomic uncertainty, and geo-political conflicts, that it believes may continue to affect Snap's business, financial condition, results of operations, and prospects. These forward-looking statements are subject to risks and uncertainties related to: Snap's financial performance; the ability to attain and sustain profitability; the ability to generate and sustain positive cash flow; the ability to attract and retain users, partners, and advertisers; competition and new market entrants; managing Snap's growth and future expenses; compliance with new laws, regulations, and executive actions; the ability to maintain, protect, and enhance Snap's intellectual property; the ability to succeed in existing and new market segments; the ability to attract and retain qualified team members and key personnel; the ability to repay or refinance outstanding debt, or to access additional financing; future acquisitions, divestitures, or investments; and the potential adverse impact of climate change, natural disasters, health epidemics, macroeconomic conditions, and war or other armed conflict, as well as risks, uncertainties, and other factors described in "Risk Factors" in Snap's Annual Report on Form 10-K for the year ended December 31, 2024 and Snap's other filings with the SEC, which are available on the SEC's website at www.sec.gov. In addition, any forward-looking statements contained in this press release are based on assumptions that Snap believes to be reasonable as of this date. Snap undertakes no obligation to update any forward-looking statements to reflect events or circumstances after the date of this press release or to reflect new information or the occurrence of unanticipated events, except as required by law.

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