SYDNEY--Zip Co. launched a 400 million Australian dollars...

SYDNEY--Zip Co. launched a 400 million Australian dollars ($305.8 million) capital raising as the buy-now-pay-later provider aims to continue its rapid U.S. growth and fund expansion into new markets.
The ASX-listed owner of the QuadPay brand on Thursday said it would offer senior unsecured convertible notes, convertible into ordinary shares and due in April 2028.
The initial conversion price is A$12.39 per share, representing a conversion premium of 35% over the reference price. The stock last traded at A$9.61, down 34% since hitting a record A$14.53 in February.
Zip foreshadowed the announcement on Wednesday, when its shares were placed into a trading halt.
It had told investors earlier in the week that its fast-growing U.S. operations had drawn $111.9 million of its $150 million off-balance sheet funding facility, of which Goldman Sachs is the senior lender.
"The additional capital from this offering will support the active pursuit of both core and international growth opportunities, as Zip becomes a truly global BNPL player," Cofounder Peter Gray said in a statement.
Zip this week said it was investing to expand its global footprint across the developed and developing world. In the third quarter, it staged a soft launch in Canada and made investments in the Philippines and the Czech Republic.
Zip launched the raising two days after its stock jumped 17% to a near five-week high after a better-than-expected third-quarter performance. Mr. Gray also told Dow Jones Newswires the company was looking at adding products such as stock and cryptocurrency exchange to its app.
The raising is the third in less than a year by Zip, which along with other installment payment platforms is targeting quick expansion in the relatively underpenetrated U.S. market.
The QuadPay U.S. business was the standout in Zip's 3Q results. It contributed 48% of Zip's A$112.3 million quarterly revenue--up from 37% in the first half--and could overtake the group's Australian and New Zealand business in revenue terms before the end of fiscal 2021.
In June 2020, Zip issued A$100 million in convertible notes and A$100 million in warrants to help fund the acquisition of the remainder of QuadPay it did not already own. In December it raised another A$120 million in a share placement before taking A$56.7 million in an upsized accompanying share purchase plan.
Investor appetite for the sector was demonstrated last month when larger rival Afterpay Ltd. raised A$1.5 billion via a convertible notes offering jointly led by Citi, Goldman Sachs and J.P. Morgan.
Zip this week said its Australia and New Zealand business remained well funded, with A$781.3 million undrawn and available from total facilities of A$2.19 billion.