Upstart Holdings, Inc. Announces Proposed Private Offering of $575,000,000 of Convertible Senior Notes Due 2026

About this update from Upstart Holdings, Inc.

[{"type":"text","content":" SAN MATEO, Calif.--(BUSINESS WIRE)--\nUpstart Holdings, Inc. (“Upstart”) (NASDAQ: UPST) today announced its intention to offer, subject to market conditions and other factors, $575,000,000 aggregate principal amount of Convertible Senior Notes due 2026 (the “notes”) in a private offering (the “offering”) to qualified institutional buyers pursuant to Rule 144A promulgated under the Securities Act of 1933, as amended (the “Securities Act”). Upstart also expects to grant the initial purchasers of the notes an option to purchase, within a 13-day period beginning on, and including, the date the notes are first issued, up to an additional $86,250,000 aggregate principal amount of the notes.\n\nThe notes will be senior, unsecured obligations of Upstart, and will bear interest payable semi-annually in arrears. The notes will be convertible into cash, shares of Upstart’s common stock, or a combination thereof, at Upstart’s election. The interest rate, conversion rate, and other terms of the notes are to be determined upon pricing of the offering.\n\nIn connection with the pricing of the notes, Upstart expects to enter into privately negotiated capped call transactions with one or more of the initial purchasers or their respective affiliates and/or other financial institutions (the “option counterparties”). The capped call transactions will cover, subject to anti-dilution adjustments, the number of shares of common stock underlying the notes sold in the offering. The capped call transactions are expected generally to reduce the potential dilution to Upstart’s common stock upon any conversion of notes and/or offset any cash payments Upstart is required to make in excess of the principal amount of converted notes, as the case may be, with such reduction and/or offset subject to a cap.\n\nUpstart has been advised that, in connection with establishing their initial hedges of the capped call transactions, the option counterparties or their respective affiliates expect to purchase shares of Upstart’s common stock and/or enter into various derivative transactions with respect to the common stock concurrently with or shortly after the pricing of the notes. This activity could increase (or reduce the size of any decrease in) the market price of Upstart’s common stock or the notes at that time. In addition, Upstart expects that the option counterp...

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