Afterpay Ltd (ASX:APT) today provide an update in relation to the Convertible Notes Offering announced on February 25, 2021.

Afterpay says it has successfully upsized and priced an offering of A$1.5 billion unsecured zero coupon convertible notes due 2026. The Notes are convertible into fully paid ordinary shares in Afterpay. The initial Conversion Price of the Notes is A$194.8220 per Ordinary Share, which represents a conversion premium of 45.0% over the Reference Share Price (A$134.36 per Ordinary Share).

The Notes will mature on or about 12 March 2026, unless redeemed, repurchased, or converted in accordance with their terms.

Afterpay intends to use the proceeds of the Convertible Notes Offering to fund the Matrix Transaction, fund the cash component of the Tender Offer, and provide additional capital to continue to accelerate underlying sales growth.

As FX News Group reported, Afterpay announced yesterday its entry into an agreement with Matrix Partners X, L.P and Weston & Co X LLC, and is launching a tender offer to eligible participants under the Afterpay US, Inc. 2018 Equity Incentive Plan (US ESOP) to increase its underlying interest in Afterpay US, Inc. from an existing level 80% to up to approximately 93%.

Under the agreement with Matrix, Matrix will waive 35% of the underlying interest it holds in Afterpay US, Inc. under the Matrix Convertible Notes for approximately A$373 million in cash. The final price will be determined by reference to the reference share price of the Convertible Notes Offering. The transaction implies an acquisition price that values Afterpay US, Inc. (on a 100% basis) at 28% of Afterpay’s total market capitalisation. The acquisition price is accretive to Afterpay shareholders across GMV, revenue and customer multiples.