Affirm Holdings, Inc. Announces Pricing of Upsized Private Offering of $1.5 Billion of 0% Convertible Senior Notes Due 2026
November 19 2021 - 6:45AM
Business Wire
Affirm Holdings, Inc. (Nasdaq: AFRM) (“Affirm” or the “Company”)
today announced the pricing of $1.5 billion aggregate principal
amount of 0% Convertible Senior Notes due 2026 (the “Notes”) in a
private offering (the “Offering”). The size of the Offering was
increased from the previously announced $1.25 billion in aggregate
principal amount. In connection with the Offering, Affirm has
granted the initial purchasers of the Notes an option to purchase,
within a 13-day period beginning on, and including, the date on
which the Notes are first issued, up to an additional $225 million
aggregate principal amount of the Notes on the same terms and
conditions. The sale of the Notes to the initial purchasers is
expected to settle on November 23, 2021, subject to customary
closing conditions.
The Notes will not bear regular interest, and the principal
amount of the Notes will not accrete. When issued, the Notes will
be senior, unsecured obligations of Affirm. The Notes will mature
on November 15, 2026, unless earlier repurchased, redeemed or
converted in accordance with their terms prior to such date. Affirm
may not redeem the Notes prior to November 20, 2024. Affirm may
redeem for cash all or any portion of the Notes, at its option, on
or after November 20, 2024, but only if the last reported sale
price per share of Affirm’s Class A common stock exceeds 130% of
the conversion price for a specified period of time.
Holders of the Notes will have the right to require Affirm to
repurchase all or a portion of their Notes upon the occurrence of a
“fundamental change” in cash at a fundamental change repurchase
price of 100% of their principal amount plus any accrued and unpaid
special interest to, but not including, the fundamental change
repurchase date. Following certain corporate events or if Affirm
calls the Notes for redemption, Affirm will, under certain
circumstances, increase the conversion rate for holders who elect
to convert their Notes in connection with such corporate event or
such redemption.
The initial conversion rate of the Notes will be 4.6371 shares
of Affirm’s Class A common stock per $1,000 principal amount of
Notes (equivalent to an initial conversion price of approximately
$215.65 per share of Affirm’s Class A common stock, which
represents a conversion premium of approximately 55.00% to the last
reported sale price of Affirm’s Class A common stock on the Nasdaq
Global Select Market on November 18, 2021). Prior to the close of
business on the business day immediately preceding August 15, 2026,
the Notes will be convertible at the option of the holders of the
Notes only upon the satisfaction of specified conditions and during
certain periods. On or after August 15, 2026 until the close of
business on the second scheduled trading day immediately preceding
the maturity date, the Notes will be convertible, at the option of
the holders of Notes, at any time regardless of such conditions.
Upon conversion, Affirm will pay cash up to the aggregate principal
amount of the Notes to be converted and pay or deliver, as the case
may be, cash, shares of Class A common stock of Affirm or a
combination of cash and shares of Class A common stock of Affirm,
at Affirm’s election, in respect of the remainder, if any, of
Affirm’s conversion obligation in excess of the aggregate principal
amount of the Notes being converted.
Affirm estimates that the net proceeds from the Offering will be
approximately $1.48 billion (or $1.70 billion if the initial
purchasers exercise their option to purchase additional Notes in
full), after deducting fees and estimated expenses. Affirm intends
to use the net proceeds from the Offering for general corporate
purposes and to fund its plans for future growth, which may include
working capital expenses, capital expenditures and associated
investments.
The Notes were offered only to persons reasonably believed to be
qualified institutional buyers pursuant to Rule 144A under the
Securities Act of 1933, as amended (the “Securities Act”). The
offer and sale of the Notes and any shares of Class A common stock
of Affirm issuable upon conversion of the Notes, if any, have not
been, and will not be, registered under the Securities Act or the
securities laws of any other jurisdiction, and unless so
registered, the Notes and such shares, if any, may not be offered
or sold in the United States except pursuant to an applicable
exemption from such registration requirements.
This press release does not constitute an offer to sell or a
solicitation of an offer to buy, nor shall there be any offer or
sale of, the Notes (or any shares of Class A common stock of Affirm
issuable upon conversion of the Notes) in any state or jurisdiction
in which the offer, solicitation, or sale would be unlawful prior
to the registration or qualification thereof under the securities
laws of any such state or jurisdiction.
Cautionary Note About Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as
amended (the “Securities Act”), and Section 21E of the Securities
Exchange Act of 1934, as amended, that involve risks and
uncertainties. All statements other than statements of historical
fact contained in this report, including statements regarding the
Company’s future results of operations and financial condition,
business strategy, and plans and objectives of management for
future operations, are forward-looking statements. In some cases,
forward-looking statements may be identified by words such as
“anticipate,” “believe,” “continue,” “could,” “design,” “estimate,”
“expect,” “intend,” “may,” “plan,” “potentially,” “predict,”
“project,” “should,” “will,” “would,” or the negative of these
terms or other similar expressions. These forward-looking
statements include, but are not limited to, statements concerning:
the successful completion of this Offering; and the Company’s
expected use of proceeds from this Offering.
Forward-looking statements are based on management’s beliefs and
assumptions and on information currently available. These
forward-looking statements are subject to a number of known and
unknown risks, uncertainties and assumptions, including risks
described under “Risk Factors” in the offering memorandum for the
Offering, the Company’s Annual Report on Form 10-K for the fiscal
year ended June 30, 2021 and the Company’s Quarterly Report on Form
10-Q for the fiscal quarter ended September 30, 2021. Except as
required by law, the Company undertakes no obligation to update
publicly any forward-looking statements for any reason after the
date of this press release or to conform these statements to actual
results or to changes in our expectations.
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