Benzinga | Jun 9, 2021 08:53AM EDT

Etsy Raises $1B Via Debt In Private Institutional Offering

* Etsy Inc (NASDAQ:ETSY) priced $1 billion 0.25% convertible senior notes due 2028 to raise $986.7 million in a private institutional offering.

* The initial conversion price of $246.80 per share represents a 45% premium to the June 8 closing price of $170.21.

* The notes will be redeemable after June 20, 2025, but only if the last reported sale price per share of Etsy's stock exceeds 130% of the conversion price for a specified period.

* Etsy has entered into capped call transactions with certain financial institutions to offset the potential stock dilution from any note conversion. The capped call transactions' initial cap price is $340.42, representing a 100% premium to the June 8 closing price.

* The company will utilize a portion of the proceeds to pay for the capped call transactions.

* Etsy will utilize a portion of the proceeds to repurchase shares worth $180 million. It will use the remainder for general corporate purposes.

* Etsy's long-term debt stood at $1.3 billion as of Mar. 31, 2021.

* Etsy shares gained 123% last year.

* Price action: ETSY shares traded higher by 1.05% at $172 in the premarket session on the last check Wednesday.