Block (SQ) 8-KSquare, Inc. Announces $2.0 Billion Offering of Senior Notes

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): May 17, 2021

Square, Inc.

(Exact name of registrant as specified in its charter)

1455 Market Street, Suite 600

San Francisco, CA 94103

(Address of principal executive offices, including zip code)

(415) 375-3176

(Registrant’s telephone number, including area code)

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

Securities registered pursuant to Section 12(b) of the Act:

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 1.01. Entry into a Material Definitive Agreement.

Purchase Agreement

On May 18, 2021, Square, Inc. (the “Company”) entered into a purchase agreement (the “Purchase Agreement”) with Goldman Sachs & Co. LLC, as representative of the several initial purchasers listed in Schedule I therein (the “Initial Purchasers”), relating to the sale by the Company of $1.0 billion aggregate principal amount of its 2.75% Senior Notes due 2026 (the “2026 Notes”), and $1.0 billion in aggregate principal amount of its 3.50% Senior Notes due 2031 (the “2031 Notes” and, together with the 2026 Notes, the “Notes”) in private placements to “qualified institutional buyers” pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”) and outside the United States to non-U.S. persons pursuant to Regulation S under the Securities Act. The Notes were issued to the Initial Purchasers pursuant to an exemption from the registration requirements of the Securities Act afforded by Section 4(a)(2) of the Securities Act.

The Company intends to use the net proceeds from the offering of the Notes for general corporate purposes, which may include potential acquisitions and strategic transactions, capital expenditures, investments and working capital.

The Purchase Agreement contains customary representations, warranties and covenants by the Company together with customary closing conditions. Under the terms of the Purchase Agreement, the Company has agreed to indemnify the Initial Purchasers against certain liabilities.

The description of the Purchase Agreement contained in this Current Report on Form 8-K is qualified in its entirety by reference to the complete text of the Purchase Agreement, a copy of which is filed as Exhibit 10.1 hereto and incorporated herein by reference.

Indentures

On May 20, 2021, the Company entered into (i) an indenture relating to the issuance of the 2026 Notes (the “2026 Notes Indenture”) and (ii) an indenture relating to the issuance of the 2031 Notes (the “2031 Notes Indenture” and, together with the 2026 Notes Indenture, the “Indentures”), in each case, by and between the Company and the Bank of New York Mellon Trust Company, N.A. (the “Trustee”), as trustee of the Notes.

Interest

The 2026 Notes mature on June 1, 2026 and bear interest at a rate of 2.75% per annum. The 2031 Notes mature on June 1, 2031 and bear interest at a rate of 3.50% per annum. Interest on each series of Notes is payable semi-annually in arrears on June 1 and December 1 of each year, commencing on December 1, 2021.

Optional Redemption

The Company may redeem either series of Notes, in whole or in part, at any time prior to May 1, 2026, in the case of the 2026 Notes, and at any time prior to March 1, 2031, in the case of the 2031 Notes, in each case at a price equal to 100% of the principal amount thereof plus a “make-whole” premium and accrued and unpaid interest, if any. On and after May 1, 2026, in the case of the 2026 Notes, and on and after March 1, 2031, in the case of the 2031 Notes, the Company may redeem the Notes of the applicable series at 100% of the principal amount plus accrued and unpaid interest, if any.

Repurchase of Notes upon a Change of Control Triggering Event

If the Company experiences a change of control triggering event (as defined in each of the Indentures), the Company must offer to repurchase each series of Notes at a repurchase price equal to 101% of the principal amount of the Notes to be repurchased, plus accrued and unpaid interest, if any, to the applicable repurchase date.

Covenants

Each Indenture contains covenants that, among other things, restrict the ability of the Company and/or its domestic restricted subsidiaries to:

These covenants are subject to a number of other limitations and exceptions set forth in each Indenture.

Each Indenture provides for customary events of default, including, but not limited to, failure to pay principal and interest, failure to comply with covenants, agreements or conditions, and certain events of bankruptcy or insolvency involving the Company and its significant subsidiaries. In the case of an event of default arising from specified events of bankruptcy or insolvency, all outstanding Notes under the applicable Indenture will become due and payable immediately without further action or notice. If any other event of default under the applicable Indenture occurs or is continuing, the applicable Trustee or holders of at least 25% in aggregate principal amount of the applicable series of outstanding Notes under the applicable Indenture may declare all the Notes of such series to be due and payable immediately.

The description of the Notes and each Indenture contained in this Current Report on Form 8-K is qualified in its entirety by reference to the complete text of (i) the Indentures which are filed as Exhibits 4.1 and 4.3 hereto and are incorporated herein by reference and (ii) the Form of 2.75% Senior Note due 2026 and the Form of 3.50% Senior Note due 2031, which are filed as Exhibits 4.2 and 4.4, respectively, hereto and are incorporated herein by reference.

Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

The information set forth under Item 1.01 is incorporated herein by reference.

Item 8.01. Other Events.

On May 17, 2021, the Company issued a press release announcing its intention to offer approximately $2.0 billion aggregate principal amount of senior notes in two series, subject to market and other conditions, in a private placement to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A under the Securities Act and outside the United States to non-U.S. persons pursuant to Regulation S under the Securities Act. A copy of the press release is attached as Exhibit 99.1 and is incorporated herein by reference.

On May 18, 2021, the Company issued a press release announcing the pricing of its offering of $1.0 billion aggregate principal amount of 2026 Notes and $1.0 billion aggregate principal amount of its 2031 Notes to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A under the Securities Act and outside the United States to non-U.S. persons pursuant to Regulation S under the Securities Act. A copy of the press release is attached as Exhibit 99.2 and is incorporated herein by reference.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Dated: May 20, 2021