Lyft's $450M Zero-Coupon Convertible Bond with 40% Premium Fuels Share Repurchases as Trading Volume Ranks 423rd

On September 5, 2025, Lyft (LYFT) closed down 0.77% with a trading volume of $260 million, ranking 423rd in market activity. The ride-hailing company executed a $450 million convertible bond (CB) offering this week, with proceeds allocated to repurchase 5.7 million shares and acquire a capped call to offset dilution from the new debt. The zero-coupon, five-year CB was priced with a 40% conversion premium, reflecting strategic capital management amid strong investor demand. Bankers noted that repeat issuers like Lyft often secure favorable pricing, though the firm declined to upsizing the offering to prioritize dilution control.

Lyft’s capital structure has historically leveraged convertible debt to balance equity preservation. In 2020, the company raised $747.5 million via a 1.5% CB and spent $132.7 million on a capped call. By 2024, it repurchased half of the 2020 CB at a discount and refinanced the remainder through a $400 million 0.625% CB. The 2025 offering follows a similar playbook, with $95.7 million allocated for share repurchases and $37.8 million for the capped call. Despite these efforts, the stock remains below its May 2020 peak of $29.53, though it has gained 30% year-to-date.

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