Upstart Holdings, Inc. (UPST) disclosed on Monday that it plans to offer $300 million in Convertible Senior Notes due 2029. This will be done through a private placement targeting qualified institutional buyers.
Additionally, the company expects to grant the initial purchasers an option to acquire an extra $45 million in notes.
These notes, maturing on October 1, 2029, can be converted into either cash, Upstart's common stock, or a combination of both.
Upstart plans to utilize the raised funds to finance capped call transactions. These transactions are designed to mitigate potential stock dilution resulting from the note conversions and to reduce corresponding cash outflows. Moreover, the proceeds will be allocated to repurchase a portion of the company's existing 0.25% Convertible Senior Notes maturing in 2026 and for other general corporate purposes.
As for pre-market trading on the Nasdaq, shares are currently at $35.89, reflecting a decline of 5.63%.
