Snowflake Inc. Closes $3.75B 0.00% Convertible Senior Notes Offering

Executive Summary

On September 28, 2026, Snowflake Inc. (NYSE: SNOW) completed a private placement of $3.75 billion aggregate principal amount of 0.00% Convertible Senior Notes, split between:

• $2.00 billion of 0.00% Convertible Senior Notes due October 15, 2029
• $1.75 billion of 0.00% Convertible Senior Notes due October 15, 2031

Additionally, the initial purchasers hold a 13-day option to acquire up to an additional $300.0 million of the 2029 Notes and up to $250.0 million of the 2031 Notes.

---

Key Terms & Structure

• Coupon & Maturity: Both tranches carry a 0.00% annual interest rate and do not accrete principal. The 2029 Notes mature on October 15, 2029, and the 2031 Notes mature on October 15, 2031.
• Conversion Rates & Initial Conversion Prices:
  • 2029 Notes: Initially 1.9985 shares of Common Stock per $1,000 principal amount (~$500.38 per share).
  • 2031 Notes: Initially 2.0662 shares of Common Stock per $1,000 principal amount (~$483.98 per share).
• Settlement Method: Snowflake has the option to satisfy conversions via cash, shares of Common Stock, or a combination thereof.
• Redemption Features:
  • 2029 Notes: Non-callable prior to April 20, 2028; thereafter redeemable if the stock price is at least 150% of the conversion price for 20 of 30 consecutive trading days.
  • 2031 Notes: Non-callable prior to October 22, 2029; thereafter redeemable if the stock price is at least 130% of the conversion price for 20 of 30 consecutive trading days.
  • Cleanup Redemption: Redeemable if less than 10% of either series principal remains outstanding.

---

Use of Proceeds & Capital Allocation

Net proceeds were approximately $3.70 billion (or $4.24 billion if the greenshoe is fully exercised):

1. Capped Call Transactions ($383.5M): Snowflake entered into privately negotiated capped calls to mitigate dilution upon conversion, with an initial cap price of $820.30 per share (a 150% premium over the reference closing price on September 28, 2026).
2. Debt Refinancing ($548.3M): Used to repurchase a portion of Snowflake's outstanding 0.00% Convertible Senior Notes due 2027 in privately negotiated transactions.
3. General Corporate Purposes: The remainder (~$2.77B) is earmarked for general corporate purposes, potential share repurchases under current or future programs, repurchases of existing 2027 or 2029 notes, and potential strategic investments or acquisitions.

---

Market Impact & Dilution Assessment

• Dilution Protection: The capped call overlay significantly reduces economic dilution up to $820.30 per share.
• Maximum Share Exposure: Initially, a maximum of 7,009,480 shares (2029 tranche) and 6,095,200 shares (2031 tranche) could be issuable under make-whole conversion caps prior to anti-dilution adjustments.
• Balance Sheet Impact: Highly favorable capital-raising at zero nominal interest expense, extending Snowflake's debt maturity profile while fortifying its cash balance.