Snowflake Gets Interest Rate of Zero on New Convertible Bond. Buyer Beware.

Snowflake the cloud software company, took advantage of strong demand in the convertible bond market to issue $2 billion of securities with an interest rate of zero, according to a press release published earlier Wednesday. Snowflake doesn’t need the money given that it has over $3 billion of cash and equivalents and is generating free cash flow, although it isn’t profitable based on generally accepted accounting principles due mostly to high stock-based compensation. The converts were sold as Rule 144A private placements to institutional investors.