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MarketScreener Homepage  >  Equities  >  Nyse  >  Square, Inc.    SQ

SQUARE, INC.

(SQ)
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SQUARE, 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, Financial Statements and Exhibits (form 8-K)

11/13/2020 | 04:21pm EST

Item 1.01 Entry into a Material Definitive Agreement.

Indentures

On November 13, 2020, Square, Inc. (the "Company") entered into an Indenture (the "2026 Indenture") relating to the issuance of $575 million aggregate principal amount of its 0% Convertible Senior Notes due 2026 (the "2026 Notes"), and an Indenture (the "2027 Indenture" and, together with the 2026 Indenture, the "Indentures") relating to the issuance of $575 million aggregate principal amount of its 0.25% Convertible Senior Notes due 2027 (the "2027 Notes" and, together with the 2026 Notes, the "Notes"), in each case, with The Bank of New York Mellon Trust Company, N.A., as trustee (the "Trustee"). The 2026 Notes will not bear interest other than under the circumstances and in the amounts described in the 2026 indenture and the principal will not accrete. The 2027 Notes will bear interest at a rate of 0.25% per year, payable semi-annually on May 1 and November 1 of each year, beginning on May 1, 2021. The 2026 Notes will mature on May 1, 2026, and the 2027 Notes will mature on November 1, 2027, in each case, unless earlier converted, redeemed or repurchased.

The initial conversion rate for each series of the Notes is 3.3430 shares of Class A Common Stock per $1,000 principal amount of such Notes (which is equivalent to an initial conversion price of approximately $299.13 per share. The conversion rate for each series of Notes will be subject to adjustment upon the occurrence of certain specified events but will not be adjusted for accrued and unpaid interest. In addition, upon the occurrence of a make-whole fundamental change (as defined in the relevant Indenture) or a notice of redemption, the Company will, in certain circumstances, increase the conversion rate of the relevant series of Notes by a number of additional shares for a holder that elects to convert all or a portion of its Notes of such series in connection with such make-whole fundamental change or that elects to convert such Notes that are subject to such notice of redemption.

Prior to the close of business on the business day immediately preceding February 1, 2026, in the case of the 2026 Notes, and prior to the close of business on the business day immediately preceding August 1, 2027, in the case of the 2027 Notes, the Notes will be convertible only under the following circumstances: (1) during any calendar quarter commencing after March 31, 2021 (and only during such calendar quarter), if the last reported sale price of the Class A Common Stock for at least 20 trading days (whether or not consecutive) during the 30 consecutive trading day period ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price for the relevant series of Notes on each applicable trading day; (2) during the five business day period after any five consecutive trading day period in which, for each trading day of that period, the trading price per $1,000 principal amount of 2026 Notes or 2027 Notes, as applicable, for such trading day was less than 98% of the product of the last reported sale price of the Class A Common Stock and the conversion rate for such series of Notes on each such trading day; (3) if the Company calls any or all of the Notes for redemption, such Notes called for redemption may be converted at any time prior to the close of business on the scheduled trading day immediately preceding the redemption date; or (4) upon the occurrence of specified corporate transactions. On or after February 1, 2026, in the case of the 2026 Notes, and on or after August 1, 2027, in the case of the 2027 Notes, until the close of business on the second scheduled trading day immediately preceding the relevant maturity date, holders of the relevant series of Notes may convert all or a portion of their Notes of such series regardless of the foregoing conditions. Upon conversion, the Notes will be settled in cash, shares of the Class A Common Stock or any combination thereof at the Company's option.

The Company may not redeem the 2026 Notes prior to November 5, 2023, and the Company may not redeem the 2027 Notes prior to November 5, 2024. The Company may redeem for cash all or any part of the Notes, at its option, on or after November 5, 2023, in the case of the 2026 Notes, and on or after November 5, 2024, in the case of the 2027 Notes, if the last reported sale price of its Class A Common Stock has been at least 130% of the conversion price for the relevant series of Notes then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date on which the Company provides notice of redemption at a redemption price equal to 100% of the principal amount of the series of Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date. No sinking fund is provided for the Notes.

Upon the occurrence of a fundamental change (as defined in the relevant Indenture) prior to the relevant maturity date, holders of the relevant series of Notes may require the Company to repurchase all or a portion of the Notes of such series for cash at a price equal to 100% of the principal amount of the series of Notes to be repurchased, plus any accrued and unpaid interest to, but excluding, the fundamental change repurchase date.

The Notes are the Company's general unsecured obligations and will rank senior in right of payment to any existing and future indebtedness that is contractually subordinated to the Notes; rank equal in right of payment with the Company's existing and future senior unsecured indebtedness that is not so subordinated, including the Company's 0.375% Convertible Senior Notes due 2022, its 0.50% Convertible Senior Notes due 2023, and its 0.125% Convertible Senior Notes due 2025; effectively rank junior in right of payment to any of the Company's existing and future secured indebtedness to the extent of the value of the assets securing such indebtedness; and be structurally subordinated to all indebtedness and other liabilities (including trade payables) of subsidiaries of the Company.

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The following events are considered "events of default" with respect to a series of Notes, which may result in the acceleration of the maturity of such Notes:

(1) the Company defaults in any payment of interest on the Notes of such series when due and payable and the default continues for a period of 30 days;

(2) the Company defaults in the payment of principal on the Notes of such series when due and payable at the stated maturity, upon any optional redemption, upon any required repurchase, upon declaration of acceleration or otherwise;

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

(4) failure by the Company to comply with its obligations under the relevant Indenture with respect to consolidation, merger and sale of assets of the Company; . . .

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an

Off-Balance Sheet Arrangement of a Registrant.

The information set forth under Item 1.01 is incorporated herein by reference.

Item 9.01 Financial Statements and Exhibits.



(d) Exhibits.



Exhibit
  No.                                    Description

4.1           Indenture, dated November 13, 2020, by and between Square, Inc. and
            The Bank of New York Mellon Trust Company, N.A. (2026 Notes)

4.2           Form of 0% Convertible Senior Note due 2026 (included in Exhibit
            4.1).

4.3           Indenture, dated November 13, 2020, by and between Square, Inc. and
            The Bank of New York Mellon Trust Company, N.A. (2027 Notes)

4.4           Form of 0.25% Convertible Senior Note due 2027 (included in Exhibit
            4.3).

104         Cover Page Interactive Data File, formatted in inline XBRL.

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© Edgar Online, source Glimpses

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