Snowflake Convertible Notes Upsized to $3.75 Billion
Snowflake convertible notes were upsized to $3.75 billion, shifting more exposure into 2029 and concentrating near-term dilution risk for traders.
KEY TAKEAWAYS
- Priced an upsized $3.75 billion Rule 144A private placement of zero-coupon convertible senior notes.
- Allocated $2.0 billion to 2029 and $1.75 billion to 2031, shifting the tranche mix toward nearer-term exposure.
- Proceeds were earmarked to fund capped calls, repurchases of some 2027 notes, and general corporate purposes.
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Snowflake Inc. (SNOW) priced an upsized private placement of convertible notes on September 29, 2026. The company said proceeds would fund repurchases of some 2027 convertible notes and general corporate purposes.
Deal Terms and Structure
The September 29 pricing release showed Snowflake issued zero-coupon convertible senior notes in two tranches: $2.0 billion due 2029 and $1.75 billion due 2031. The company described the sale as a private placement to qualified institutional buyers.
The initial proposal, outlined in a September 28 release, planned $1.3 billion due 2029 and $2.2 billion due 2031, with initial-purchaser options exercisable over 13 days to buy up to $200 million additional 2029 notes and $300 million additional 2031 notes. The notes were described as general unsecured obligations that do not bear regular interest and whose principal does not accrete. Maturities were set for October 15, 2029, and October 15, 2031. Conversion could be settled in cash, shares of common stock, or a combination, at Snowflake’s election.
The priced offering shifted the tranche mix, increasing the nearer-term 2029 notes by $700 million and reducing the 2031 notes by $450 million, raising the total offering by $250 million to $3.75 billion. The pricing release did not specify whether the initial-purchaser options were exercised or modified.
Use of Proceeds and Timeline
Snowflake said proceeds would fund capped-call transactions designed to reduce potential dilution, repurchase a portion of outstanding 2027 convertible notes, and support general corporate purposes. These moves reallocate convertible exposure toward the nearer maturity, altering the timing of potential equity dilution from conversions.
The proposed-offering release was issued at 7:09 a.m. ET on September 28, followed by the pricing release at 2:31 a.m. ET on September 29.
The zero-coupon notes do not pay regular interest. Upon conversion, Snowflake may deliver cash, shares, or a combination, subject to final terms. The releases did not disclose conversion rates, capped-call costs, repurchase terms, or the allocation of proceeds among uses.
