OAKLAND, Calif. – Block Inc. (NYSE:SQ), the technology company formerly known as Square, Inc., has upsized its private placement offering to $2 billion of 6.50% senior notes due 2032, exceeding the initially announced $1.5 billion. The sale is expected to be finalized on May 9, 2024, with customary closing conditions.
The notes will pay interest semi-annually and mature on May 15, 2032, unless repurchased or redeemed earlier by the company. In the event of certain change of control scenarios, note holders have the right to require Block to repurchase the notes at 101% of the principal amount plus any accrued interest.
Block reserves the right to redeem the notes before May 15, 2027, at a redemption price equal to the principal amount plus a "make-whole" premium and any accrued interest. After this date, redemption terms are subject to specified prices.
The proceeds from the note offering are earmarked for general corporate purposes. These include potential repayment of existing debt, acquisitions, strategic transactions, capital expenditures, investments, and working capital.
The notes, which have not been registered under the Securities Act of 1933 or any state securities laws, are being offered only to qualified institutional buyers in the United States and to non-U.S. persons outside the country. The offering is not a public solicitation and is subject to regulatory restrictions.
Block Inc. operates globally, focusing on financial services through its various brands, including Square, Cash App, TIDAL, and TBD. The company's integrated technology solutions support commerce and financial activities for sellers and consumers, with services ranging from payment processing to music streaming and financial investments.
InvestingPro Insights
As Block Inc. (NYSE:SQ) prepares to finalize its upsized private placement, the company's financial health and market performance are of significant interest to potential investors. According to real-time data from InvestingPro, Block Inc. boasts a substantial market capitalization of $42.87 billion USD, underscoring its prominence in the financial services industry. The company's revenue growth has been impressive, with a 23.28% increase over the last twelve months as of Q1 2024, and a gross profit margin of 34.77% indicating a strong ability to convert sales into profit.
InvestingPro Tips highlight that Block Inc. is expected to see net income growth this year, as evidenced by the 23 analysts who have revised their earnings upwards for the upcoming period. This optimism is reflected in the company's low PEG ratio of 0.46, suggesting that the stock may be undervalued relative to its near-term earnings growth potential. Moreover, the company's stock has experienced a significant price uptick of 44.04% over the last six months, signaling robust investor confidence.
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