Snowflake prices $3.75B convertible notes offering in two tranches

Snowflake Inc. (NYSE: SNOW) has priced a private placement of $3.75 billion in 0.00% Convertible Senior Notes, upsized from an initially announced $3.5 billion, according to a company statement.

The offering consists of $2.0 billion in notes due October 15, 2029, and $1.75 billion in notes due October 15, 2031. The sale is expected to close on October 1, 2026, subject to customary closing conditions. Snowflake also granted initial purchasers options to buy up to an additional $300 million of the 2029 notes and $250 million of the 2031 notes within 13 days of issuance.

Net proceeds are estimated at approximately $3.70 billion, or up to $4.24 billion if the purchase options are exercised in full. Snowflake plans to use approximately $383.5 million to fund capped call transactions and approximately $548.3 million to repurchase a portion of its existing 0.00% Convertible Senior Notes due 2027. Remaining proceeds are earmarked for general corporate purposes, which may include stock repurchases, acquisitions, or strategic investments.

The 2029 notes carry an initial conversion price of approximately $500.38 per share, representing a 52.5% premium to Snowflake's closing stock price on September 28, 2026. The 2031 notes carry an initial conversion price of approximately $483.98 per share, a 47.5% premium to the same reference price.

In connection with the offering, Snowflake entered into capped call transactions with a cap price of $820.30 per share, representing a 150% premium over the September 28, 2026 closing price. These transactions are intended to reduce potential dilution to existing shareholders upon note conversion.

The notes are general unsecured obligations and bear no regular interest. They are being offered to qualified institutional buyers under Rule 144A and have not been registered under the Securities Act of 1933.

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