Lyft, Inc. ( LYFT ) shares traded higher on Wednesday. The company announced an offering of $450 million of convertible senior notes.

What To Know: Lyft ( LYFT ) priced $450 million in convertible senior notes due 2030 in a private offering to qualified institutional buyers under Rule 144A. The initial purchasers also have an option to buy an additional $50 million in notes within 13 days of issuance.

The sale is expected to settle Sept. 5, resulting in about $438.8 million in net proceeds. Lyft ( LYFT ) intends to use roughly $37.8 million to pay for capped call transactions and about $95.7 million to repurchase 5.7 million shares at the Sept. 2 closing price of $16.80. Remaining proceeds may go toward additional buybacks, corporate purposes, working capital, capital expenditures and potential acquisitions.

The notes are senior, unsecured obligations that do not bear regular interest and mature Sept. 15, 2030. They may be converted at an initial rate of 42.5170 shares per $1,000 principal amount, equivalent to a price of about $23.52 per share, a 40% premium to Tuesday's close. Lyft ( LYFT ) entered into capped call transactions that cap dilution at an initial price of $33.60 per share.

LYFT Price Action: Lyft ( LYFT ) shares closed Wednesday up 0.71% higher at $16.92, according to data from Benzinga Pro.

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