Twitter has announced it is planning to offer up at least $1bn (£873.7m) in new convertible debt, which will be the first time since 2014 that the platform has sold convertible notes.
The debt will be convertible into stock or cash at Twitters election, with the interest and conversion rates to be determined when the notes are priced. There is an option to issue an additional $150m of notes if there is sufficient demand from institutional investors.
Twitter has said a portion of the proceeds will be used to pay for the convertible note hedge transaction, with the remaining funds to be used for general corporate purposes.
Yesterday Twitters share price was up 5.1 per cent at closing after gaining 15 per cent in three days, fuelled by the news that it will be added to the S&P 500 index on June 7, though it fell following todays announcement in pre-market trading.
As of today, the stock has increased 66 per cent year to date. The share price is currently down by 0.3 per cent.
Twitter had $1.9bn of convertible debt left outstanding at the end of last quarter. Some $935m of 0.25 per cent notes will mature in September 2019, followed by $954 of 1 per cent notes to mature in September 2021.
Twitter also has a $1bn revolving credit facility that remained unused at the end of March.