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    SNAP   US83304A1060

SNAP INC.

(SNAP)
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SNAP INC : Entry into a Material Definitive Agreement, Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant, Unregistered Sale of Equity Securities, Financial Statements and Exhibits (form 8-K)

04/30/2021 | 05:29pm EDT

Item 1.01 Entry into a Material Definitive Agreement

Indenture and Notes

The Notes were issued pursuant to an Indenture, dated April 30, 2021 (the "Indenture"), between us and U.S. Bank National Association, as trustee ("Trustee"). The Notes are our unsecured, unsubordinated obligations. The Notes will not bear regular interest, and the principal amount of the notes will not accrete. The Notes mature on May 1, 2027 unless repurchased, redeemed, or converted in accordance with their terms prior to such date.

We may redeem for cash all or any portion of the Notes, at our option, on or after May 5, 2024 if the last reported sale price of our Class A common stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive), including the trading day immediately preceding the date on which we provide notice of redemption, during any 30 consecutive trading day period ending on, and including, the trading day immediately preceding the date on which we provide notice of redemption at a redemption price equal to 100% of the principal amount of the notes to be redeemed, plus accrued and unpaid special interest or additional interest, if any, to, but excluding, the redemption date. No sinking fund is provided for the Notes, which means that we are not required to redeem or retire the Notes periodically.

The Indenture includes customary terms and covenants, including certain events of default after which the Notes may be due and payable immediately. The following events are considered "events of default," which may result in acceleration of the maturity of the Notes:



    (1)  default by us in any payment of special interest or additional interest,
         if any, that has accrued on any Note when due and payable and the default
         continues for a period of 30 days;




    (2)  default by us in the payment of principal of any Note when due and
         payable at its stated maturity, on optional redemption, on any required
         repurchase, on declaration of acceleration, or otherwise;




    (3)  failure by us to comply with our obligation to convert the Notes in
         accordance with the Indenture on exercise of a holder's conversion right
         and such failure continues for a period of three business days;




    (4)  failure by us to give a fundamental change notice, notice of a make-whole
         fundamental change, or notice of a specified distribution or specified
         corporate event, in each case when due if such failure continues for
         three business days;




    (5)  failure by us to comply with our obligations under the Indenture with
         respect to a consolidation, merger, or sale of assets;




    (6)  failure by us for 60 days after written notice has been received from
         either the Trustee or the holders of at least 25% in aggregate principal
         amount of the Notes then outstanding to comply with any of our other
         agreements contained in the Notes or Indenture;

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    (7)  default by us or any of our significant subsidiaries (as defined in the
         Indenture) with respect to any mortgage, agreement, or other instrument
         under which there may be outstanding, or by which there may be secured or
         evidenced, any indebtedness for money borrowed in excess of $150,000,000
         (or its foreign currency equivalent) in the aggregate of us and any such
         subsidiary (i) resulting in such indebtedness becoming or being declared
         due and payable or (ii) constituting a failure to pay the principal or
         interest of any such debt when due and payable at its stated maturity, on
         required repurchase, on declaration of acceleration or otherwise, and in
         the cases of clauses (i) and (ii), such acceleration will not have been
         rescinded or annulled or such failure to pay or default will not have
         been cured or waived, or such indebtedness will not have been paid or
         discharged, as the case may be, within 30 days after written notice to us
         by the Trustee or us and the Trustee by holders of at least 25% in
         aggregate principal amount of the Notes then outstanding; or




    (8)  certain events of bankruptcy, insolvency, or reorganization of us or any
         of our significant subsidiaries.

The Notes are convertible into cash, shares of our Class A common stock, or a combination thereof, at our election, at an initial conversion rate of 11.2042 shares of Class A common stock per $1,000 principal amount of the Notes, which is equivalent to an initial conversion price of approximately $89.25 per share of Class A common stock subject to adjustment. Prior to February 1, 2027, such conversion is subject to the satisfaction of certain conditions set forth below.

Holders of the Notes who convert their Notes in connection with a make-whole fundamental change (as defined in the Indenture) or in connection with a redemption are, under certain circumstances, entitled to an increase in the conversion rate. Additionally, in the event of a fundamental change (as defined in the Indenture), holders of the Notes may require us to repurchase all or a portion of their Notes at a price equal to 100% of the principal amount of Notes, plus any accrued and unpaid special interest, if any, to, but excluding, the repurchase date.

Holders of the Notes may convert all or a portion of their Notes at their option prior to February 1, 2027, in multiples of $1,000 principal amount, only under the following circumstances:



    •     during any calendar quarter commencing after the calendar quarter ending
          on June 30, 2021, if the last reported sale price of our Class A common
          stock for at least 20 trading days (whether or not consecutive) during a
          period of 30 consecutive trading days ending on, and including, the last
          trading day of the preceding calendar quarter is greater than or equal to
          130% of the conversion price of the Notes on each applicable trading day;




    •     during the five consecutive business day period immediately following any
          ten consecutive trading day period in which the trading price per $1,000
          principal amount of the Notes for each trading day of that ten
          consecutive trading day period was less than 98% of the product of the
          last reported sale price of our Class A common stock and the conversion
          rate for the Notes on each such trading day;




    •     if we call such Notes for redemption, at any time prior to the close of
          business on the scheduled trading day immediately preceding the
          redemption date, in which case we may be required to increase the
          conversion rate for the Notes so surrendered for conversion in connection
          with such redemption notice (or at our election, all notes); or



• on the occurrence of specified corporate events.

A copy of the Indenture and form of Note are filed as Exhibit 4.1 and Exhibit 4.2, respectively, to this Current Report on Form 8-K and are incorporated by . . .

Item 2.03 Creation of a Direct Financial Obligation under an Off-Balance Sheet

Arrangement of a Registrant

See Item 1.01 above, which is incorporated by reference.

Item 3.02 Unregistered Sale of Equity Securities

See the explanatory note above and Item 1.01 under the headings "Indenture and Notes" and "Exchange Transactions," each of which is incorporated by reference. We sold the Notes to the Initial Purchasers pursuant to the Purchase Agreement in reliance on the exemption from the registration requirements provided by Section 4(a)(2) of the Securities Act, and the Notes were initially resold to qualified institutional buyers as defined in, and in reliance on, Rule 144A of the Securities Act. We issued the Exchange Shares in reliance on the exemptions from the registration requirements provided by Section 4(a)(2) and Section 3(a)(9) of the Securities Act.

The offer and sale of the Exchange Shares, the Notes, and our Class A common stock issuable on conversion of the Notes, if any, have not been and will not be registered under the Securities Act or the securities laws of any other jurisdiction, and such securities may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements. This Current Report on Form 8-K does not constitute an offer to sell, or a solicitation of an offer to buy, any security and will not constitute an offer, solicitation, or sale in any jurisdiction in which such offering would be unlawful.

Forward-Looking Statements

This Current Report on Form 8-K contains forward-looking statements within the meaning of the federal securities laws. These statements include, but are not limited to, expectations regarding the effect of the Capped Call Transactions and regarding actions of the Capped Call Counterparties and their respective affiliates. Forward-looking statements include all statements that are not historical facts. In some cases, forward-looking statements can be identified by terms such as "anticipates," "believes," "could," "estimates," "expects," "intends," "may," "plans," "potential," "will," or similar expressions and the negatives of those words. Forward-looking statements involve substantial risks and uncertainties that may cause actual results to differ materially from those that we expect. These risks and uncertainties include market risks, trends, and conditions. These and other risks are more fully described in our filings with the Securities and Exchange Commission, including in the section titled "Risk Factors" in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2021. In light of these risks, you should not place undue reliance on such forward-looking statements. Forward-looking statements represent our beliefs and assumptions only as of the date of this Current Report on Form 8-K. We disclaim any obligation to update forward-looking statements.

Item 9.01 Financial Statements and Exhibits



(d) Exhibits



Exhibit
No.         Description

4.1           Indenture, dated April 30, 2021, by and between Snap Inc. and U.S.
            Bank National Association, as Trustee.

4.2           Form of Global Note, representing Snap Inc.'s 0% Convertible Senior
            Notes due 2027 (included as Exhibit A to the Indenture filed as
            Exhibit 4.1).

10.1          Fourth Amendment to Revolving Credit Agreement, by and among Snap
            Inc., the lenders party thereto, and Morgan Stanley Senior Funding
            Inc., as administrative agent, dated April 27, 2021.

99.1          Form of Capped Call Confirmation.

104         Cover Page Interactive Data File (embedded within the Inline XBRL
            document).

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© Edgar Online, source Glimpses

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