Spotify seeks $500 million from investors in convertible notes: SvD daily

(Reuters) — Music streaming service Spotify is seeking to raise $500 million from investors to finance future growth through convertible notes, Swedish daily Svenska Dagbladet reported on Wednesday.

Citing bank documents and publishing screenshots of those on its website, Svenska Dagbladet said Spotify planned to offer notes with a 4 percent yield which would convert into Spotify shares in case of a future initial public offering at a discount to the IPO price.

The news of a new round of financing to boost growth and the prospect of an IPO, comes as Apple, the world’s most valuable company, is quickly gaining clients in Spotify’s market after launching a music streaming service last summer.

Svenska Dagbladet said note holders would get a discount of 17.5 percent against the share price in an IPO if a listing happened within a year. After one year, the discount rate would increase by 2.5 percent every six months, the paper said.

Spotify spokespersons were not immediately available for comment.