Affirm Holdings, Inc. (Nasdaq: AFRM) (“Affirm” or the “Company”)
today announced the pricing of $800 million aggregate principal
amount of 0.75% Convertible Senior Notes due 2029 (the “Notes”) in
a private offering (the “Offering”). The size of the Offering was
increased from the previously announced $750 million in aggregate
principal amount. In connection with the Offering, Affirm has
granted the initial purchasers of the Notes an option to purchase,
within a 13-day period beginning on, and including, the date on
which the Notes are first issued, up to an additional $120 million
aggregate principal amount of the Notes on the same terms and
conditions. The sale of the Notes to the initial purchasers is
expected to settle on December 20, 2024, subject to customary
closing conditions.
The notes will bear interest at a rate of 0.75% per annum
payable semiannually in arrears on June 15 and December 15 of each
year, beginning on June 15, 2025. When issued, the Notes will be
senior, unsecured obligations of Affirm. The Notes will mature on
December 15, 2029, unless earlier repurchased, redeemed or
converted in accordance with their terms prior to such date. Affirm
may not redeem the Notes prior to December 20, 2027. Affirm may
redeem for cash all or any portion of the Notes, at its option, on
or after December 20, 2027, but only if the last reported sale
price per share of Affirm’s Class A common stock has been at least
130% of the conversion price for a specified period of time.
Holders of the Notes will have the right to require Affirm to
repurchase all or a portion of their Notes upon the occurrence of a
“fundamental change” in cash at a fundamental change repurchase
price of 100% of their principal amount plus accrued and unpaid
interest to, but not including, the fundamental change repurchase
date. Following certain corporate events or if Affirm calls the
Notes for redemption, Affirm will, under certain circumstances,
increase the conversion rate for holders who elect to convert their
Notes in connection with such corporate event or such
redemption.
The initial conversion rate of the Notes will be 9.8992 shares
of Affirm’s Class A common stock per $1,000 principal amount of
Notes (equivalent to an initial conversion price of approximately
$101.02 per share of Affirm’s Class A common stock, which
represents a conversion premium of approximately 42.5% to the last
reported sale price of Affirm’s Class A common stock on the Nasdaq
Global Select Market on December 17, 2024). Prior to the close of
business on the business day immediately preceding September 15,
2029, the Notes will be convertible at the option of the holders of
the Notes only upon the satisfaction of specified conditions and
during certain periods. On or after September 15, 2029 until the
close of business on the second scheduled trading day immediately
preceding the maturity date, the Notes will be convertible, at the
option of the holders of Notes, at any time regardless of such
conditions. Upon conversion, Affirm will pay cash up to the
aggregate principal amount of the Notes to be converted and pay or
deliver, as the case may be, cash, shares of Class A common stock
of Affirm or a combination of cash and shares of Class A common
stock of Affirm, at Affirm’s election, in respect of the remainder,
if any, of Affirm’s conversion obligation in excess of the
aggregate principal amount of the Notes being converted.
Affirm estimates that the net proceeds from the Offering will be
approximately $785.2 million (or approximately $903.1 million if
the initial purchasers exercise their option to purchase additional
Notes in full), after deducting fees and estimated expenses. Affirm
expects to use the net proceeds from the Offering, together with
cash on hand, to repurchase approximately $960 million aggregate
principal amount of Affirm’s 0% convertible senior notes due 2026
(the “2026 notes”) for $892.8 million of cash, in separate and
privately negotiated transactions with certain holders of the 2026
notes, effected through one of the initial purchasers of the Notes
or its affiliate. Affirm may also repurchase additional outstanding
2026 notes following the completion of the Offering.
In addition, Affirm expects to repurchase 3,526,590 shares of
its Class A common stock for approximately $250.0 million in cash
concurrently with the Offering in privately negotiated transactions
effected with or through one of the initial purchasers or its
affiliate, at a purchase price per share equal to the closing price
of Affirm’s Class A common stock on December 17, 2024, which was
$70.89 per share.
Affirm expects that holders of the 2026 notes that are
repurchased by Affirm as described above may enter into or unwind
various derivatives with respect to Affirm’s Class A common stock
(including entering into derivatives with one or more of the
initial purchasers in the Offering or their respective affiliates)
and/or purchase or sell shares of Affirm’s Class A common stock
concurrently with or shortly after the pricing of the Notes.
Repurchases of the 2026 notes, and the potential related market
activities by holders thereof, together with the repurchase by
Affirm of any of its Class A common stock, could increase (or
reduce the size of any decrease in) or decrease (or reduce the size
of any increase in) the market price of Affirm’s Class A common
stock, which may affect the trading price of the Notes offered in
the Offering at that time and, to the extent effected concurrently
with the pricing of the Offering, the initial conversion price of
the Notes. Affirm cannot predict the magnitude of such market
activity or such share repurchases or the overall effect they will
have on the price of the Notes offered in the Offering or Affirm’s
Class A common stock.
In addition, any share repurchases following this Offering could
affect the market price of the Notes and, if conducted during an
observation period for the conversion of any Notes, could affect
the amount and value of the consideration that is due upon such
conversion. However, Affirm does not have an authorized share
repurchase program other than the share repurchases expected to be
executed concurrently with the pricing of this Offering.
This press release is not an offer to repurchase the 2026 notes
or Affirm’s Class A common stock and the Offering of the Notes is
not contingent upon the repurchase of the 2026 notes or the
repurchase of Affirm’s Class A common stock.
The Notes were offered only to persons reasonably believed to be
qualified institutional buyers pursuant to Rule 144A under the
Securities Act of 1933, as amended (the “Securities Act”). The
offer and sale of the Notes and any shares of Class A common stock
of Affirm issuable upon 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 unless so
registered, the Notes and such shares, if any, may not be offered
or sold in the United States except pursuant to an applicable
exemption from such registration requirements.
This press release does not constitute an offer to sell or a
solicitation of an offer to buy, nor shall there be any offer or
sale of, the Notes (or any shares of Class A common stock of Affirm
issuable upon conversion of the Notes) in any state or jurisdiction
in which the offer, solicitation, or sale would be unlawful prior
to the registration or qualification thereof under the securities
laws of any such state or jurisdiction.
About Affirm
Affirm’s mission is to deliver honest financial products that
improve lives. By building a new kind of payment network – one
based on trust, transparency and putting people first – we empower
millions of consumers to spend and save responsibly, and give
thousands of businesses the tools to fuel growth. Unlike most
credit cards and other pay-over-time options, we never charge any
late or hidden fees. Follow Affirm on social media: LinkedIn |
Instagram | Facebook | X.
Cautionary Note About Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as
amended (the “Securities Act”), and Section 21E of the Securities
Exchange Act of 1934, as amended, that involve risks and
uncertainties. All statements other than statements of historical
fact contained in this report, including statements regarding the
successful completion of the Offering, and the Company’s expected
use of proceeds from the Offering, are forward-looking statements.
In some cases, forward-looking statements may be identified by
words such as “anticipate,” “believe,” “continue,” “could,”
“design,” “estimate,” “expect,” “intend,” “may,” “plan,”
“potentially,” “predict,” “project,” “should,” “will,” “would,” or
the negative of these terms or other similar expressions.
Forward-looking statements are based on management’s beliefs and
assumptions and on information currently available. These
forward-looking statements are subject to a number of known and
unknown risks, uncertainties and assumptions, including risks
described under “Risk Factors” in the offering memorandum for the
Offering, the Company’s Annual Report on Form 10-K for the fiscal
year ended June 30, 2024 and the Company’s Quarterly Report on Form
10-Q for the fiscal quarter ended September 30, 2024. Except as
required by law, the Company undertakes no obligation to update
publicly any forward-looking statements for any reason after the
date of this press release or to conform these statements to actual
results or to changes in the Company’s expectations.
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