Upstart Holdings, Inc. has announced its proposed private offering of $300,000,000 of Convertible Senior Notes due 2029. The company also plans to grant the initial purchasers of the notes an option to purchase up to an additional $45,000,000 aggregate principal amount of the notes. The notes will be senior, unsecured obligations of Upstart and will bear interest payable semi-annually in arrears.
The company intends to use a portion of the net proceeds from the offering to pay the cost of capped call transactions and to repurchase a portion of its outstanding 0.25% Convertible Senior Notes due 2026. The remainder of the net proceeds from the offering will be used for general corporate purposes.
In connection with the pricing of the notes, Upstart expects to enter into privately negotiated capped call transactions with one or more of the initial purchasers or their respective affiliates and/or other financial institutions. The capped call transactions will cover the number of shares of common stock underlying the notes sold in the offering.
The notes will be convertible into cash, shares of Upstart’s common stock, or a combination thereof, at Upstart’s election. The interest rate, initial conversion rate, and other terms of the notes will be determined at the time of pricing of the offering.
In connection with the issuance of its 2026 Notes, Upstart entered into capped call transactions with certain financial institutions, including certain of the initial purchasers or their affiliates. If Upstart repurchases any of the 2026 Notes, the company expects to enter into privately negotiated agreements with the existing capped call counterparties to terminate a portion of the existing capped call transactions corresponding to any principal amount of the 2026 Notes repurchased.
The notes will only be offered to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A promulgated under the Securities Act by means of a private offering memorandum. Neither the notes nor the shares of Upstart’s common stock potentially issuable upon conversion of the notes, if any, have been, or will be, registered under the Securities Act or the securities laws of any other jurisdiction.
This announcement is neither an offer to sell nor a solicitation of an offer to buy any of these securities and shall not constitute an offer, solicitation, or sale in any jurisdiction in which such offer, solicitation, or sale is unlawful. As a result of these announcements, the company's shares have moved 4.4% on the market, and are now trading at a price of $40.0. For the full picture, make sure to review Upstart's 8-K report.
