On Wednesday, Groupon Inc. (NASDAQ:GRPN) announced a new financing strategy involving the issuance of $244 million in senior convertible notes due 2030, as part of a privately arranged exchange with holders of its existing 2026 and 2027 notes.
The company revealed this initiative as a proactive move to restructure its outstanding debt and extend maturities while offering a higher conversion premium to noteholders.
The restructuring involves two key exchanges: $20 million worth of 1.125% Convertible Senior Notes due 2026 and $150 million of 6.25% Convertible Senior Secured Notes due 2027 will be converted into a total of $244.07 million in new 4.875% Convertible Senior Notes maturing in 2030.
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The newly issued 2030 Notes will offer a 4.875% coupon and may be settled in cash, common stock, or a mix of both at Groupon's discretion. With an initial conversion rate translating to roughly $54.04 per share, the notes reflect a 50% premium to the stock's closing price on June 17, 2025. Groupon also retains the option to redeem the notes starting in July 2028, contingent on the stock trading above 130% of the conversion price for 20 out of 30 trading days.
As part of the agreement, about 76% of holders of the 2027 Notes have consented to proposed changes to their note terms, effectively removing most restrictive covenants and releasing related collateral.
These changes will take effect upon the closing of the exchange, expected around July 2, 2025, pending standard closing conditions.
This debt realignment gives Groupon greater financial flexibility and reduces its secured debt burden while extending maturities.
Price Action: GRPN shares are trading higher by 0.46% to $36.20 at last check on Wednesday.
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