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# Snowflake Prices $3.75 Billion In Zero-Coupon Convertible Notes, Upsized From $3.5 Billion Target
- URL: https://www.bullished.co/snowflake-prices-3-75-billion-in-zero-coupon-convertible-notes-upsized-from-3-5-billion-83092d41/
- Published: 2026-10-02T20:25:53.000Z
- Updated: 2026-10-03T20:38:40.000Z
- Description: The cloud data company split the debt into two tranches — $2.0 billion due 2029 and $1.75 billion due 2031 — with no regular interest on either.
- Author: Matteo Parrino
- Tags: SEC Filings, SNOW, Industry: Technology

Snowflake [priced $3.75 billion](https://www.sec.gov/Archives/edgar/data/0001640147/000164014726000043/exhibit992-pricingpressrel.htm?ref=bullished.co) in zero-coupon convertible senior notes on Monday, closing a deal that grew beyond its initial $3.5 billion target as institutional demand pushed both tranches higher. Net proceeds are estimated at about $3.70 billion, rising to roughly $4.24 billion if initial purchasers exercise their overallotment options in full, according to the pricing press release.

## What The 8-K Says

Snowflake's [8-K filed Friday](https://www.sec.gov/Archives/edgar/data/0001640147/000164014726000043/snow-20260928.htm?ref=bullished.co) reports that the company completed the private placement on Monday, September 28, with the notes issued under separate indentures dated October 1 — U.S. Bank Trust Company, National Association serving as trustee for both series.

The offering launched Monday at an initial target of [$3.5 billion](https://seekingalpha.com/news/4647502-snowflake-announces-proposed-private-placement-of-35b-of-000-convertible-senior-notes?ref=bullished.co) split between $1.3 billion in 2029 notes and $2.2 billion in 2031 notes. By the time pricing was set, both tranches had grown: the final deal carries $2.0 billion due October 15, 2029 and $1.75 billion due October 15, 2031.

Neither series pays regular interest, and the principal amount does not accrete — meaning Snowflake carries the full face value of the debt to maturity with no cash coupon along the way. The company can satisfy conversion obligations in cash, shares, or a combination of both, at its election.

## Conversion Terms And Dilution Protection

The 2029 notes carry an initial conversion rate of 1.9985 shares of Snowflake common stock per $1,000 in principal — equivalent to a conversion price of about $500.38 per share, a roughly 53% premium to Monday's closing price. The 2031 notes convert at an initial rate of 2.0662 shares per $1,000 in principal, or about $483.98 per share, a roughly 48% premium.

To limit the dilution those conversions could create, Snowflake used about $383.5 million of proceeds to fund capped call transactions — derivatives that extend dilution protection up to $820.30 per share, according to the [SEC filing](https://www.sec.gov/Archives/edgar/data/0001640147/000164014726000043/snow-20260928.htm?ref=bullished.co). The capped calls effectively raise the price at which new shares would need to be issued before holders of the notes see equity upside.

Conversion is not freely available from day one. Holders of the 2029 notes may convert at will only on or after July 15, 2029; before that date, conversion is conditional — triggered by the stock trading at or above 150% of the conversion price for at least 20 days in a 30-day window, by a trading-price test, by a company-initiated redemption call, or by specified corporate events. The 2031 notes carry a parallel structure with the same conditional window closing on July 15, 2031.

Snowflake may redeem the 2029 notes for cash beginning April 20, 2028 — but only if the stock has traded at or above 150% of the then-current conversion price for at least 20 days in any 30-day period. The redemption threshold for the 2031 notes is lower, at 130% of the conversion price, and the earliest call date is October 22, 2029.

## How Snowflake Is Deploying The Cash

Beyond the capped call spend, Snowflake directed about $548.3 million of proceeds to repurchase roughly $261.8 million in principal of its existing 2027 convertible notes, according to the [pricing press release](https://www.sec.gov/Archives/edgar/data/0001640147/000164014726000043/exhibit992-pricingpressrel.htm?ref=bullished.co). That move retires near-term debt ahead of its maturity, reducing the refinancing pressure the company would otherwise face in 2027.

The company serves more than 14,500 customers globally. The remaining proceeds are available for general corporate purposes, which the filing notes could include acquisitions.

SNOW shares were flat at $341.04 in Friday after-hours trading, according to market data, as the 8-K was disclosed after the regular session closed.

## What To Watch

Initial purchasers have a 13-day window from the October 1 closing date to exercise overallotment options worth up to an additional $300 million in 2029 notes and up to an additional $250 million in 2031 notes. Whether they exercise those options in full will determine whether total proceeds approach the $4.24 billion ceiling the company cited.

The notes are general, senior unsecured obligations — no collateral backs them. Standard cross-default provisions kick in if Snowflake or any significant subsidiary fails to pay on debt exceeding $250 million in principal, and a fundamental change in control would give holders the right to require repurchase at par plus any accrued special interest.

The 13-day overallotment window opened October 1; if initial purchasers exercise it in full, Snowflake's total take from the deal reaches roughly $4.24 billion.

### Sources

- [8-K Filing — Snowflake Inc. (SNOW)](https://www.sec.gov/Archives/edgar/data/0001640147/000164014726000043/snow-20260928.htm?ref=bullished.co) — SEC EDGAR
- [Exhibit exhibit991-launchpressrele.htm — Snowflake Inc. 8-K exhibit](https://www.sec.gov/Archives/edgar/data/0001640147/000164014726000043/exhibit991-launchpressrele.htm?ref=bullished.co) — SEC EDGAR
- [Exhibit exhibit992-pricingpressrel.htm — Snowflake Inc. 8-K exhibit](https://www.sec.gov/Archives/edgar/data/0001640147/000164014726000043/exhibit992-pricingpressrel.htm?ref=bullished.co) — SEC EDGAR
- [Snowflake Prices Upsized Private Placement of $3.75 Billion of 0.00% Convertible Senior Notes | Financial Post](https://financialpost.com/pmn/business-wire-news-releases-pmn/snowflake-prices-upsized-private-placement-of-3-75-billion-of-0-00-convertible-senior-notes?ref=bullished.co) — financialpost.com
- [Snowflake Announces Proposed Private Placement of $3.5 Billion of 0.00% Convertible Senior Notes | Financial Post](https://financialpost.com/pmn/business-wire-news-releases-pmn/snowflake-announces-proposed-private-placement-of-3-5-billion-of-0-00-convertible-senior-notes?ref=bullished.co) — financialpost.com
- [Snowflake announces proposed private placement of $3.5B of 0.00% convertible senior notes | Seeking Alpha](https://seekingalpha.com/news/4647502-snowflake-announces-proposed-private-placement-of-35b-of-000-convertible-senior-notes?ref=bullished.co) — seekingalpha.com
- [Snowflake (SNOW) Plans $3.5 Billion Convertible Notes Offering With Capped Calls](https://finance.yahoo.com/markets/stocks/articles/snowflake-snow-plans-3-5-010808846.html?ref=bullished.co) — finance.yahoo.com
- [Snowflake Stock Falls Amid $3.5 billion Convertible Debt Offering | Investor's Business Daily](https://www.investors.com/news/technology/snowflake-stock-falls-convertible-debt-offering/?ref=bullished.co) — investors.com