Affirm Holdings Prices $800M Convertible Note Offering, Plans $250M Share Buyback: Retail Optimism Climbs

Affirm said that the initial conversion rate of the notes will be 9.8992 shares of the company’s Class A common stock per $1,000 principal amount of notes.

Buy-now-pay-later firm Affirm Holdings Inc (AFRM) announced the pricing of its $800 million upsized offering of convertible senior notes maturing in 2029.

The size of the offering was increased from the previously announced $750 million in aggregate principal amount, it said.

Affirm said that the initial conversion rate of the notes will be 9.8992 shares of the company’s Class A common stock per $1,000 principal amount of notes.

The firm estimates the net proceeds from the offering to be approximately $785.2 million (or roughly $903.1 million if the initial purchasers exercise their option to purchase additional notes in full) after deducting fees and estimated expenses.

The company expects to use the net proceeds, along with its cash on hand, to repurchase approximately $960 million of the aggregate principal amount of its 0% convertible senior notes due 2026 for $892.8 million of cash.

Affirm also expects to repurchase over 3.5 million shares of its Class A common stock for approximately $250 million in cash concurrently with the offering in privately negotiated transactions.

This will likely be done at a purchase price per share equal to the closing price of Affirm’s Class A common stock on Dec. 17, 2024, which was $70.89 per share.

Following the announcement, retail sentiment on Stocktwits jumped into the ‘bullish’ territory (62/100) from ‘bearish’ a day ago, accompanied by high message volume.

Shares of Affirm closed over 2% lower on Tuesday and traded in the red in Wednesday’s pre-market session.

Affirm was recently in the news after it signed a long-term capital partnership with investment firm Sixth Street, representing its largest capital commitment to date.

The firm said that through its asset-based finance platform, Sixth Street will invest up to $4 billion by purchasing Affirm’s loans in a unique AssetCo structure pursuant to a three-year forward flow agreement.

Affirm noted that the transaction provides additional off-balance sheet funding with the ability to extend up to more than $20 billion in loans over the next three years as the company continues to scale its payment network.

Notably, shares of Affirm have gained over 52% since the beginning of the year, significantly outperforming the benchmark U.S. indices.

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