The streaming giant is offering exchangeable notes it can pay off with cash or stock, while building its war chest for acquisitions or other purposes.
Spotify USA intends to offer $1.3 billion in exchangeable notes due in 2026, the company announced Wednesday. In addition, Spotify USA expects to grant the initial buyers of the notes an option to purchase an additional $200 million.
While some music companies have taken on debt during the pandemic — including Live Nation and Madison Square Garden Entertainment — or sold notes to replace existing debt, Spotify has operated and acquired companies with cash on hand. During 2020, Spotify had $259 million in cash from operations and posted a net increase of $172 million in cash and cash equivalents. Its balance sheet had cash and cash equivalents of $1.15 billion of cash and cash equivalents and no long-term debt.