Snowflake to Raise $2.0 Billion through Convertible Senior Notes in Private Placement | Finance

No-Headquarters/BOZEMAN, Mont., September 23, 2024–(BUSINESS WIRE)–Snowflake Inc. (NYSE: SNOW) (“Snowflake”), the AI Data Cloud Company, right this moment introduced that it intends to supply, topic to market circumstances and different components, $1.0 billion mixture principal quantity of its Convertible Senior Notes due 2027 (the “2027 notes”) and $1.0 billion mixture principal quantity of its Convertible Senior Notes due 2029 (the “2029 notes,” and along with the 2027 notes, the “notes”) in a non-public placement (the “offering”) to individuals fairly believed to be certified institutional consumers pursuant to Rule 144A underneath the Securities Act of 1933, as amended (the “Securities Act”). Snowflake additionally intends to grant the preliminary purchasers of the notes choices to buy, inside a 13-day interval starting on, and together with, the date on which the notes are first issued, up to a further $150.0 million mixture principal quantity of the 2027 notes and up to a further $150.0 million mixture principal quantity of the 2029 notes.

The notes can be basic unsecured obligations of Snowflake and can accrue curiosity payable semiannually in arrears. Upon conversion, Snowflake can pay or ship, because the case could also be, money, shares of Snowflake’s Class A typical inventory, par worth $0.0001 per share (“common stock”), or a mixture of money and shares of Snowflake’s widespread inventory, at its election. The rate of interest, preliminary conversion fee and different phrases of every collection of notes can be decided on the time of pricing of the providing.

Snowflake expects to use the online proceeds from the providing to pay the price of the capped name transactions described beneath, to repurchase up to $575.0 million of shares of its widespread inventory from purchasers of the notes in the providing in privately negotiated transactions as described beneath and for basic company functions, which can embrace different repurchases of its widespread inventory from time to time underneath its current or any future inventory repurchase program, in addition to acquisitions or strategic investments in complementary companies or applied sciences, though Snowflake doesn't at the moment have any plans for any such acquisitions or investments. If the preliminary purchasers train their choice to buy extra notes of a collection, Snowflake expects to use a portion of the online proceeds from the sale of the extra notes to enter into extra capped name transactions with respect to the related collection of notes as to which the choice was exercised with the related choice counterparties as described beneath, and the rest for different basic company functions as described above.

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In reference to the pricing of the notes, Snowflake expects to enter into privately negotiated capped name transactions relating to every collection of notes with a number of of the preliminary purchasers or associates thereof and/or different monetary establishments (the “option counterparties”). The capped name transactions relating to the 2027 notes will cowl, topic to customary changes considerably related to these relevant to the 2027 notes, the variety of shares of widespread inventory initially underlying the 2027 notes, and the capped name transactions relating to the 2029 notes will cowl, topic to customary changes considerably related to these relevant to the 2029 notes, the variety of shares of widespread inventory initially underlying the 2029 notes. The capped name transactions relating to every collection of notes are typically anticipated to scale back the potential dilution to Snowflake’s widespread inventory upon any conversion of the related collection of notes and/or offset any money funds Snowflake is required to make in extra of the principal quantity of transformed notes of such collection, because the case could also be, with such discount and/or offset topic to a cap.

In reference to establishing their preliminary hedges of the capped name transactions, Snowflake expects the choice counterparties or their respective associates will enter into numerous spinoff transactions with respect to Snowflake’s widespread inventory and/or buy shares of Snowflake’s widespread inventory concurrently with or shortly after the pricing of the notes, together with with, or from, sure traders in the notes. This exercise might improve (or scale back the scale of any lower in) the market value of Snowflake’s widespread inventory or the notes at the moment.

In addition, the choice counterparties or their respective associates might modify their hedge positions by coming into into or unwinding numerous derivatives with respect to Snowflake’s widespread inventory and/or buying or promoting shares of widespread inventory or different securities of Snowflake in secondary market transactions following the pricing of the notes and prior to the maturity of every collection of notes (and are probably to accomplish that throughout any statement interval associated to a conversion of the notes or, to the extent Snowflake workouts the related election underneath the capped name transactions, following any repurchase or redemption of the notes). This exercise might additionally trigger or keep away from a rise or a lower in the market value of Snowflake’s widespread inventory or the notes, which might have an effect on a noteholder’s means to convert the notes and, to the extent the exercise happens throughout any statement interval associated to a conversion of notes, it might have an effect on the variety of shares, if any, and worth of the consideration {that a} noteholder will obtain upon conversion of the notes.

Snowflake expects to deplete to $575.0 million of the online proceeds from the providing to repurchase shares of its widespread inventory from purchasers of the notes in the providing in privately negotiated transactions entered into concurrently with the pricing of the notes in the providing with or through one of many preliminary purchasers or its affiliate (the “stock repurchases”). Snowflake expects the acquisition value per share of the widespread inventory repurchased in the inventory repurchases will equal the closing value per share of its widespread inventory on the date of the providing. The inventory repurchases can be effected as a part of Snowflake’s inventory repurchase program approved by its board of administrators in February 2023 and elevated and prolonged in August 2024. Accordingly, the inventory repurchases will scale back the roughly $2.55 billion remaining quantity approved and obtainable underneath such inventory repurchase program as of the date hereof. No assurance might be given as to how a lot, if any, of Snowflake’s widespread inventory can be repurchased or the phrases on which it will likely be repurchased. This press launch shouldn't be a suggestion to repurchase shares of Snowflake’s widespread inventory, and the providing of the notes shouldn't be contingent upon the repurchase of shares of Snowflake’s widespread inventory.

The capped name transactions and the inventory repurchases might improve (or scale back the scale of any lower in) the market value of Snowflake’s widespread inventory, which can have an effect on the buying and selling value of the notes supplied in the providing at the moment and the preliminary conversion value of the related collection of notes. Snowflake can't predict the magnitude of such market exercise or the general impact these transactions could have on the value of the notes supplied in the providing or its widespread inventory.

The notes and any shares of Snowflake’s widespread inventory issuable upon conversion of the notes haven't been and won't be registered underneath the Securities Act, any state securities legal guidelines or the securities legal guidelines of some other jurisdiction, and except so registered, will not be supplied or bought in the United States absent registration or an relevant exemption from, or in a transaction not topic to, the registration necessities of the Securities Act and different relevant securities legal guidelines.

This press launch is neither a suggestion to promote nor a solicitation of a suggestion to purchase any of those securities nor shall there be any sale of those securities in any state or jurisdiction in which such a suggestion, solicitation or sale could be illegal prior to the registration or qualification thereof underneath the securities legal guidelines of any such state or jurisdiction.

Forward-Looking Statements

This press launch incorporates “forward-looking” statements inside the which means of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended, together with statements relating to, amongst different issues, the proposed providing, together with statements regarding the proposed phrases and anticipated completion, timing and measurement of the proposed providing of the notes, the capped name transactions and any inventory repurchases, the anticipated use of proceeds from the proposed providing, the timing or quantity of any repurchases of shares of our widespread inventory, and the potential affect of the foregoing or associated transactions on dilution to holders of our widespread inventory and the market value of our widespread inventory, the buying and selling value of every collection of notes or the conversion value of every collection of notes. Such forward-looking statements contain identified and unknown dangers, uncertainties and different components which will trigger precise occasions, outcomes or outcomes to differ materially from these expressed or implied by the forward-looking statements. These dangers embrace, however should not restricted to, market dangers, traits and circumstances, our means to full the proposed providing on the anticipated phrases, or in any respect, whether or not we can be ready to fulfill closing circumstances associated to the proposed providing, whether or not and on what phrases we might repurchase any shares of our widespread inventory, adjustments in the construction or phrases of the capped name transactions and unanticipated makes use of of capital, any of which might differ or change based mostly upon market circumstances or for different causes, and people dangers included in the part titled “Risk Factors” in our Securities and Exchange Commission (“SEC”) filings and reviews, together with our Quarterly Report on Form 10-Q for the fiscal quarter ended July 31, 2024 and different filings that we make from time to time with the SEC, which can be found on the SEC’s web site at www.sec.gov. All forward-looking statements contained in this press launch communicate solely as of the date on which they have been made. Except as required by legislation, we undertake no obligation to replace such forward-looking statements to mirror occasions that happen or circumstances that exist after the date on which they have been made.

About Snowflake

Snowflake makes enterprise AI simple, environment friendly and trusted. Thousands of corporations across the globe, together with lots of of the world’s largest, use Snowflake’s AI Data Cloud to share knowledge, construct purposes, and energy their enterprise with AI. The period of enterprise AI is right here.

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