Item 1.01   Entry into a Material Definitive Agreement.
On October 4, 2021, SoFi Technologies, Inc., a Delaware corporation ("SoFi" or
the "Company"), closed its previously announced issuance and sale of $1.2
billion aggregate principal amount of the Company's convertible senior notes due
2026 (the "notes"). The principal amount of notes includes $100 million
aggregate principal amount of notes that was purchased by the initial purchasers
pursuant to the initial purchasers' option to purchase additional notes, which
option was exercised in full by the initial purchasers on September 30, 2021.
The estimated net proceeds from the offering were $1.176 billion, after
deducting the initial purchasers' discount and before the cost of the capped
call transactions described below and offering expenses payable by the Company.
Indenture
The notes were issued pursuant to, and are governed by, an indenture (the
"Indenture"), dated as of October 4, 2021, between the Company and U.S. Bank
National Association, as trustee (the "Trustee"). The notes will be the
Company's unsecured, unsubordinated obligations and will be (i) equal in right
of payment with the Company's existing and future unsecured, unsubordinated
indebtedness; (ii) senior in right of payment to the Company's existing and
future indebtedness that is expressly subordinated in right of payment to the
notes; (iii) effectively subordinated to the Company's existing and future
secured indebtedness, to the extent of the value of the collateral securing that
indebtedness; and (iv) structurally subordinated to all existing and future
indebtedness and other liabilities, including trade payables, and (to the extent
that the Company is not a holder thereof) preferred equity, if any, of the
Company's subsidiaries.
The notes will not bear regular interest and the principal amount of the notes
will not accrete. The notes will mature on October 15, 2026 (the "Maturity
Date"), unless earlier repurchased, redeemed or converted. Prior to the close of
business on the business day immediately preceding April 15, 2026 (the "Free
Convertibility Date"), noteholders may convert their notes at their option only
in the following circumstances:
(i)during any calendar quarter commencing after the calendar quarter ending on
December 31, 2021, if the last reported sale price per share of the Company's
common stock for each of at least 20 trading days, whether or not consecutive,
during the 30 consecutive trading days ending on, and including, the last
trading day of the immediately preceding calendar quarter, exceeds 130% of the
conversion price then in effect on each applicable trading day, as determined by
the Company in good faith;
(ii)during the five consecutive business days immediately after any five
consecutive trading day period (such five consecutive trading day period, the
"Measurement Period") if the trading price per $1,000 principal amount of notes
for each trading day of the Measurement Period was less than 98% of the product
of the last reported sale price per share of the Company's common stock on such
trading day and the conversion rate on such trading day, subject to compliance
with certain procedures and conditions, as set forth in the Indenture;
(iii)upon the occurrence of certain corporate events or distributions on the
Company's common stock, as set forth in the Indenture; and
(iv)if the Company calls such notes for redemption (but solely, subject to
certain exceptions, with respect to such notes called for redemption).
Noteholders may convert their notes at their option at any time from, and
including, the Free Convertibility Date until the close of business on the
second scheduled trading day immediately before the Maturity Date, regardless of
the foregoing conditions. The Company will settle conversions by paying or
delivering, as applicable, at the Company's election, cash, shares of the
Company's common stock or a combination of cash and shares of the Company's
common stock, based on the applicable conversion rate(s). If the Company elects
to deliver cash or a combination of cash and shares of the Company's common
stock, then the consideration due upon conversion will be determined over an
observation period consisting of 30 "VWAP Trading Days" (as defined in the
Indenture). The initial conversion rate is 44.6150 shares of the Company's
common stock per $1,000 principal amount of notes, which represents an initial
conversion price of approximately $22.41 per share of the Company's common
stock. The conversion rate and conversion price will be subject to customary
adjustments upon the occurrence of certain
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events. In addition, if certain corporate events that constitute a "Make-Whole
Fundamental Change" (as defined in the Indenture) occur, then the conversion
rate will, in certain circumstances, be increased for a specified period of
time.
The notes will be redeemable, in whole or in part, at the Company's option at
any time, and from time to time, on or after October 15, 2024 and on or before
the 30th scheduled trading day immediately before the maturity date, at a cash
redemption price equal to the principal amount of the notes to be redeemed, plus
accrued and unpaid special interest and additional interest, if any, thereon to,
but excluding, the redemption date, but only if certain liquidity conditions
described in the Indenture are satisfied and the last reported sale price per
share of the Company's common stock exceeds 130% of the conversion price on (i)
each of at least 20 trading days, whether or not consecutive, during the 30
consecutive trading days ending on, and including, the trading day immediately
before the date the Company sends the related redemption notice and (ii) the
trading day immediately before the date the Company sends such notice. In
addition, calling any Note for redemption will constitute a Make-Whole
Fundamental Change with respect to that Note, in which case the conversion rate
applicable to the conversion of that Note will be increased in certain
circumstances if it is converted after it is called for redemption.
If certain corporate events that constitute a "Fundamental Change" (as defined
in the Indenture) occur, then noteholders will have the right to require the
Company to repurchase their notes at a cash repurchase price equal to the
principal amount of the notes to be repurchased, plus accrued and unpaid special
interest and additional interest, if any, thereon to, but excluding, the
"Fundamental Change Repurchase Date" (as defined in the Indenture). The
definition of Fundamental Change includes certain business combination
transactions involving the Company and certain de-listing events with respect to
the Company's common stock.
The Indenture does not contain any financial or operating covenants or
restrictions on the payments of dividends, the incurrence of indebtedness or the
issuance or repurchase of securities by the Company or any of its subsidiaries.
The Indenture contains customary terms and covenants and events of default. If
any event of default (other than certain events of bankruptcy, insolvency or
reorganization involving the Company) occurs and is continuing, then, the
Trustee, by written notice to the Company, or noteholders of at least 25% of the
aggregate principal amount of notes then outstanding, by written notice to the
Company and the Trustee, may declare the principal amount of, and all accrued
and unpaid special interest and additional interest, if any, on, all of the
notes then outstanding to become due and payable immediately. If an event of
default involving certain events of bankruptcy, insolvency or reorganization
occurs, then the principal amount of, and all accrued and unpaid special
interest and additional interest, if any, on, all of the notes then outstanding
will immediately become due and payable without any further action or notice by
any person. However, notwithstanding the foregoing, the Company may elect, at
its option, that the sole remedy for an event of default relating to certain
failures by the Company to comply with certain reporting covenants in the
Indenture consist exclusively of the right of the noteholders to receive special
interest on the notes for up to 365 calendar days during which such event of
default has occurred and is continuing, at a specified rate for the first 180
days of 0.25% per annum, and thereafter at a rate of 0.50% per annum, on the
principal amount of the notes.
The above description of the Indenture and the notes is a summary and is not
complete. A copy of the Indenture and the form of the certificate representing
the notes are filed as Exhibits 4.1 and 4.2, respectively, to this Current
Report on Form 8-K and are incorporated herein by reference. The above summary
is qualified in its entirety by reference to the terms of the Indenture and the
notes filed as exhibits hereto.
Capped Call Transactions
On September 29, 2021, in connection with the pricing of the notes, the Company
entered into confirmations substantially in the form attached hereto as Exhibit
10.1 evidencing privately negotiated capped call transactions (the "Base Capped
Call Transactions") with certain financial institutions (the "Capped Call
Counterparties"). On September 30, 2021, in connection with the exercise by the
initial purchasers of their option to purchase additional notes, the Company
entered into additional confirmations, also substantially in the form attached
hereto as Exhibit 10.1, evidencing additional privately negotiated capped call
transactions (the "Additional Capped Call Transactions," and together with the
Base Capped Call Transactions, the "Capped Call Transactions") with each of the
Capped Call Counterparties.
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The Capped Call Transactions initially cover, subject to customary anti-dilution
adjustments, the number of shares of common stock that initially underlie the
notes. The Capped Call Transactions are expected to generally reduce the
potential dilutive effect on the common stock upon any conversion of notes
and/or offset any cash payments the Company is required to make in excess of the
principal amount of converted notes, as the case may be, with such reduction
and/or offset subject to a cap which initially is $32.02 per share, representing
a premium of 100% over the last reported sale price per share of the common
stock on September 29, 2021, subject to certain adjustments under the terms of
the Capped Call Transactions.
In connection with establishing their initial hedges of the Capped Call
Transactions, the Company understands that the Capped Call Counterparties or
their respective affiliates expect to enter into various derivative transactions
with respect to the common stock and/or purchase shares of the common stock
concurrently with or shortly after the pricing of the notes and the exercise by
the initial purchasers of their option to purchase additional notes. This
activity could increase (or reduce the size of any decrease in) the market price
of the common stock or the notes at that time.
In addition, the Company understands that the Capped Call Counterparties or
their respective affiliates may modify their hedge positions by entering into or
unwinding various derivatives with respect to the common stock and/or purchasing
or selling the common stock or other securities of the Company in secondary
market transactions following the pricing of the notes and prior to the maturity
of the notes (and are likely to do so following any conversion of the notes, any
repurchase of the notes by the Company on any fundamental change repurchase
date, any redemption date or any other date on which the notes are retired by
the Company, in each case if the Company exercises the relevant election to
terminate the corresponding portion of the Capped Call Transactions). This
activity could also cause or avoid an increase or a decrease in the market price
of the common stock or the notes, which could affect the ability of holders to
convert the notes and, to the extent the activity occurs during any observation
period related to a conversion of notes, it could affect the number of shares
and value of the consideration that holders will receive upon conversion of the
notes.
The Capped Call Transactions are separate transactions entered into by the
Company with each of the Capped Call Counterparties, are not part of the terms
of the notes, and do not affect any holder's rights under the notes. Holders of
the notes do not have any rights with respect to the Capped Call Transactions.
The above descriptions of the Capped Call Transactions confirmations are a
summary only and are qualified in their entirety by reference to the form of
Capped Call Transactions confirmation, which is attached hereto as Exhibit 10.1,
and is incorporated herein by reference.
The Capped Call Counterparties and/or their affiliates have in the past
performed, and may in the future from time to time perform, investment banking,
financial advisory, lending and/or commercial banking services, or other
services for the Company and its subsidiaries, for which they have received, and
may in the future receive, customary compensation and expense reimbursement.
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 above in Item 1.01 of this Current Report on Form 8-K
is incorporated by reference into this Item 2.03.
Item 3.02  Unregistered Sales of Equity Securities.
Sale of the Notes
As described in Item 1.01 of this Current Report on Form 8-K, the Company issued
$1.2 billion aggregate principal amount of notes to the initial purchasers on
October 4, 2021 in a private placement pursuant to exemptions from the
registration requirements of the Securities Act of 1933, as amended (the
"Securities Act").
The disclosure set forth in Item 1.01 above is incorporated by reference into
this Item 3.02. The notes were issued to the initial purchasers in reliance upon
the exemption from registration provided by Section 4(a)(2) of the Securities
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Act. The initial purchasers are initially offering the notes only to persons
whom the initial purchasers reasonably believe are "qualified institutional
buyers," as defined in, and in accordance with, Rule 144A under the Securities
Act. The Company relied on this exemption from registration based in part on
representations made by the initial purchasers. Any shares of the Company's
common stock that may be issued upon conversion of the notes will be issued in
reliance upon Section 3(a)(9) of the Securities Act as involving an exchange by
the Company exclusively with its security holders. The notes and common stock
issuable upon conversion of the notes have not been registered under the
Securities Act and may not be offered or sold in the United States absent
registration or an applicable exemption from registration requirements.
A maximum of 74,953,080 shares of the Company's common stock may be issued upon
conversion of the notes in full, based on the maximum conversion rate of 62.4609
shares of the Company's common stock per $1,000 principal amount of notes, which
is subject to customary anti-dilution adjustments.
Item 9.01  Financial Statements and Exhibits.
(d) Exhibits
Exhibit No.                Description

  4.1                        Indenture, dated as of October 4, 2021,

between SoFi Technologies, Inc.


                           and U.S. Bank National Association, as Trustee
  4.2                        Form of     Note     representing the 0.00% Convertible Senior Note    s
                             due 2026 (included as Exhibit A to Exhibit 4.1)
  10.1                       Form of Confirmation for Capped Call Transactions
104                        Cover Page Interactive Data File (embedded

within the inline XBRL document)


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