NEW YORK–(BUSINESS WIRE) – Spotify Technology SA (“Spotify”) (NYSE: SPOT) announced today that its indirect subsidiary Spotify USA Inc. (“Spotify USA”) intends to offer a total of $ 1,300,000,000 in nominal amount, subject to market and other conditions, exchangeable senior notes due 2026 (the “Notes”) in a private offering to qualified institutional buyers under Rule 144A of the Securities Act of 1933, as amended (the “Securities Act”). The Notes are fully and unconditionally guaranteed by Spotify on a senior, unsecured basis. Spotify USA also expects to provide first-time buyers of the Notes an option to purchase the Notes to settle within a period of 13 days from the date of the initial issue of the Notes, up to an additional $ 200,000,000 in face value.
The Notes are senior, unsecured obligations of Spotify USA that may accrue semiannual interest retrospectively and mature on March 15, 2026, unless they have previously been repurchased, redeemed or exchanged. In certain circumstances and at certain times, creditors have the right to exchange their bonds. Spotify USA will process the exchange through payment or delivery of cash, Spotify common stock, or a combination of cash and Spotify common stock at Spotify USA’s option. The bonds cannot be redeemed before March 20, 2024, except in the case of certain tax changes. The Notes may, at the option of Spotify USA, be redeemed for cash in whole or in part (subject to certain restrictions) at any time and from time to time on or after March 20, 2024 and on or before the 40th planned trading day immediately before the due date, but only if the last reported selling price per Spotify common share for a given period exceeds 130% of the exchange rate. In addition, at the option of Spotify USA, the bonds can be redeemed in whole or in part at any time in connection with certain changes in tax law. The redemption price corresponds to the principal amount of the bonds to be redeemed plus accrued and unpaid interest, if any, up to, but excluding, the redemption date. The interest rate, initial exchange rate and other terms of the Notes will be determined at the price of the Offering.
Spotify USA intends to use the net proceeds from the offering for general corporate purposes.
The offer and sale of the Notes, the Guarantee and any common stock that may be issued upon conversion of the Notes have not been and will not be registered under the Securities Act or any other securities laws, and the Notes and such common stock cannot be registered, offered or sold, except as part of an exception to or in any transaction that is not subject to the registration requirements of the Securities Act and other applicable securities laws. This press release does not constitute an offer to sell or the solicitation of an offer to buy the Notes or common stock that may be issued upon conversion of the Notes, nor will any sale of the Notes or such common stock take place in any form, state or any other jurisdiction, in which such an offer, sale or solicitation would be unlawful.
Forward-Looking Statements
This press release contains forward-looking statements, including statements regarding the anticipated terms of the Notes being offered, the completion, timing and size of the proposed offering, and the intended use of the proceeds. Forward-looking statements represent Spotify’s and Spotify USA’s current expectations about future events and are subject to known and unknown risks and uncertainties that could cause actual results to differ materially from those implied in the forward-looking statements. These risks and uncertainties include market conditions, including market interest rates, the trading price and volatility of Spotify common stock and the risks relating to the respective business of Spotify and Spotify USA, including those in periodic reports that Spotify files from time to time , S. Spotify USA may not be able to complete the proposed offer described in this press release and, if the proposed offer is completed, cannot make any representations as to the final terms of the offer or the Notes or its ability to effectively use the net proceeds as described above apply. The forward-looking statements contained in this press release speak only as of the date of this press release, and neither Spotify nor Spotify USA undertake to update the statements contained in this press release for future developments, unless required by law.