Peloton Interactive (NASDAQ: PTON) this morning announced that it intends to raise U$600.0 million in aggregate principal via the sale of convertible senior notes. The notes are to be sold via a private offering, with a due date of 2026.
Notably, pricing of the offering has not yet been determined of the offering, with details including the conversion price and the interest rate on the debt not yet provided by the company. The notes are to be senior and unsecured, convertible into Class A common shares or cash at Peloton’s election. An option to purchase up to an additional $90 million in aggregate principal for a period of 13 days has also been granted.
The company also intends to enter capped call transactions that are privately negotiated, which will cover the number of shares underlying the notes of the offering, with the capped call expected to reduce potential dilution to the firms Class A common shares. The option counterparties are expected to hedge their call option via the purchase of Class A common shares or via other derivative transactions that “could” increase the market price of the firms Class A shares, as per the company.
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Net proceeds from the transaction are to be used for general corporate purposes, including working capital, capital expenditures, and investments and acquisitions. Proceeds from the financing are to be also used to pay the cost of the capped call transactions – which are being entered into as a function of the financing.
Peloton Interactive last traded at $146.14 on the Nasdaq.
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