Lyft, Inc. has announced its intention to offer $450 million aggregate principal amount of Convertible Senior Notes due 2030 in a private offering, with an option for the initial purchasers to buy an additional $50 million aggregate principal amount.
The notes will be senior, unsecured obligations of Lyft, with interest payable semi-annually in arrears. Upon conversion, Lyft 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 Lyft’s Class A common stock, or a combination of both, at Lyft’s election, in respect of the remainder.
Lyft intends to use the net proceeds of the offering for several purposes, including paying the cost of capped call transactions, repurchasing up to approximately $100 million of the Class A common stock from institutional investors, and potentially entering into additional capped call transactions with the option counterparties using a portion of the net proceeds from the sale of additional notes. Any remaining net proceeds will be used for potential future repurchases of its Class A common stock and/or for general corporate purposes.
In connection with the pricing of the notes, Lyft expects to enter into privately negotiated capped call transactions with the option counterparties, which are generally expected to reduce potential dilution to the Class A common stock upon any conversion of notes and/or offset any cash payments Lyft elects to make in excess of the principal amount of converted notes, subject to a cap.
The notes will only be offered to qualified institutional buyers pursuant to Rule 144A under the Securities Act, and neither the notes nor the potentially issuable shares of Class A common stock upon conversion have been 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 -0.77% on the market, and are now trading at a price of $16.66. Check out the company's full 8-K submission here.
