Robinhood is raising $2 billion in zero-coupon convertible bonds to buy back stock
TL;DR
Robinhood plans to sell $2bn in zero-coupon convertible notes due 2029, using proceeds for buybacks and capped calls to limit dilution.
Robinhood Markets is raising two billion dollars through a sale of convertible senior notes due October 2029, joining a surge of zero-coupon convertible issuance from technology companies betting that investors will accept no interest in exchange for equity upside. Goldman Sachs and JPMorgan are leading the offering, according to Bloomberg, with a greenshoe option that could bring the total to $2.2 billion.
The notes carry a zero percent coupon, meaning Robinhood pays no interest for the life of the debt. The conversion premium is expected to land between 60 and 65 percent above the stock’s reference price, a level that signals confidence in the share price trajectory but also reflects how favourable conditions have become for issuers in the convertible market.
Part of the proceeds will fund roughly...
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