After publishing record profits last week, Jack Dorsey’s company hits a big blow with a giant loan aimed at institutional investors.

Block, the company of Jack Dorsey (the co-founder of Twitter), specialist in online payment, strikes a big blow.

On Monday, May 6, the group announced that it was going to borrow $1.5 billion in the form of an issue of senior debt securities via a private placement intended solely for professional investors, such as banks, investment funds or even pension funds.

“The interest rate, repayment provisions, maturity date and other terms of the Notes will be determined by negotiations between Block and the initial purchasers,” the release said. The debt will be used in particular to refinance existing debt, but also concerns “potential acquisitions and strategic transactions, capital expenditures, investments and working capital”, we can read.

Serene future

In this context, the famous Fitch agency released a note on Block. It is not able to give a credit rating, because it is private debt, but the agency notes that fundamentally Block has ample opportunity to capitalize on the growth of the online payment and consumer service sectors.

Indeed, the company benefits from a financial structure which appears to be quite solid (last week, the company published record profits in the first quarter), borrowings already made in convertible bonds and lines of credit which will allow financing until 2025/2026, with real solid cash support.

Block’s stock gained 5.8% at the close on Monday and despite the volatility of recent months, it posted a nice 25% growth over one year.

Antoine Larigaudrie with Pauline Armandet


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