Cloud Firm Snowflake Seeks $2 Billion in Convertible Bonds

(Bloomberg) -- Snowflake Inc. is seeking to raise $2 billion from the sale of convertible bonds. 

The data analytics provider is offering two tranches of $1 billion each in a private placement, according to a statement Monday. Snowflake is marketing its convertible senior notes due 2027 and 2029 respectively with a coupon of 0% to 0.5% each, according to people familiar with the matter.

Snowflake is seeking a conversion premium of 32.5% to 37.5% for the notes, the people said, asking not to be identified as the information isn’t public. It intends to use the proceeds for purposes including buying back as much as $575 million worth of shares from the buyers of the notes, the statement showed.

The company may also use the proceeds for acquisitions or strategic investments in complimentary businesses, though it doesn’t currently have any such plans, according to the statement.

Snowflake shares closed at $113.26 each on Monday, and fell 3% in after-market trading. They have declined 43% in the year to date, as the company has struggled with disappointing earnings, executive changes and a major hacking incident.

A representative for Snowflake didn’t immediately respond to requests for comment. 

Snowflake offers software that helps customers find, organize and use huge amounts of information from a variety of sources. Under Chief Executive Officer Sridhar Ramaswamy, who took over the role in February, Snowflake has launched products focused on generative AI and other new ways to analyze large sets of data.

(Updates throughout with context.)

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