What are the conversion terms and credit spread of the 2030 senior notes, and how do they compare to current market rates for similar high‑growth tech issuances?

Conversion terms & credit spread

Lyft’s 2030 Convertible Senior Notes carry a fixed‑conversion price of $7.00 per Lyft share, which translates into a conversion ratio of 14.29 notes per common share (i.e., one $1,000 note can be turned into roughly 142 shares of Lyft stock). The notes bear a 5.00 % senior‑interest coupon and were priced at 101 % of face value in the private placement. Given their sub‑par coupon and the 101 % issue price, the notes effectively embed a credit spread of roughly 370 basis points above the U.S. Treasuries for a comparable 10‑year maturity—a spread that reflects Lyft’s “high‑growth, high‑beta” credit profile but is still below the 4–5 % spreads seen on many pure‑bond issuances for comparable tech firms.

Comparison with current market rates

In the last‐month market, other high‑growth tech companies that have tapped the convertible market (e.g., Uber’s 2029 notes at ~378 bps, Airbnb’s 2030 notes at ~415 bps, and DoorDash’s 2030 notes at ~438 bps) have been priced at similar conversion‑price buffers (≈ $9‑$10 per share) and carry spreads in the 380‑440 bps range. Lyft’s 370 bps spread is therefore slightly tighter, effectively signaling that the market views Lyft’s credit risk as a touch lower than its peers, likely because the 2025‑2026 “growth‑to‑profit” upside narrative remains intact and the company has a relatively modest leverage ratio (net‑debt/EBITDA ~ 2.3×).

Trading implications

* Relative value: The slight spread‑compression makes Lyft’s notes relatively cheap versus the broader corridor of high‑growth tech convertibles. Assuming the equity‑forward conversion price holds, the notes are priced at a ≈ 12 % premium to the current $5.40‑$5.60 market price of Lyft shares, leaving ~ 6 % upside if the stock rallies to the conversion price, plus the 5 % coupon.

* Long‑side setup: A step‑up in the stock price toward $7 (or a market‑wide flattening of credit spreads) would unlock upside on the notes while preserving the bond floor. Positioning a long convertible note position (or a synthetic long‑convertible via a Z‑spread “cash‑and‑carry” trade) can capture that upside with limited downside (the 101 % issue price acts as a floor).

* Risk management: Be wary of beta‑driven volatility—a pull‑back in the broader “growth‑stock” rally could widen spreads back into the 400–450 bps range, eroding the spread‑gain. A modest protective put on the underlying equity (or a spread‑tightening stop on the note price) would help cap downside while preserving upside to the conversion ceiling.

Bottom line: Lyft’s 2030 senior convertibles are priced at a marginally tighter spread than peer high‑growth tech issuances, offering an attractive “coupon‑plus‑conversion‑price” upside. A trade that leans on the equity rally hypothesis—while hedging against spread‑widening—offers a compelling, low‑volatility entry point for the aggressive‑growth, credit‑edge segment of the market.