Twitter To Raise Up To $1.5 Billion Via Convertible Notes

Twitter is offering $1.5 billion convertible notes, which will help the social media company raise cash for further expansion, Bloomberg reported Wednesday.

The report said the convertible bonds will be sold in two parts, each worth $650 million and maturing in five years and seven years, respectively. The total amount would reach $1.5 billion if all participating banks agree to join the offering, it added.

Twitter executives saw the debt market as a better option to raise cash since it's less costly and won't dilute their ownership of the company, according to the report. Twitter is not expected to be profitable this year.

The report noted that this is the first time Twitter is raising money through the debt market. It's also Twitter's first major financing decision since hiring Anthony Noto as its new CFO in July.

The Federal Reserve is offering near-zero interest rates, which is causing U.S. companies to sell record amounts of debt. In the first eight months of this year, U.S companies have sold $1.07 trillion in bonds, Bloomberg said.