Upstart Holdings Inc (NASDAQ:UPST) shares are trading lower Tuesday after the company announced a proposed private offering of convertible senior notes.

What Happened: After the market close on Monday, Upstart announced that it intends to offer $425 million of convertible senior notes due 2030 in a private offering to qualified institutional buyers.

Upstart will grant the underwriters a 13-day option to purchase up to an additional $75 million worth of the notes.

The notes will mature on Nov. 15, 2030, unless earlier converted, repurchased or redeemed. The notes will be convertible into cash, shares of Upstart common stock, or a combination.

Upstart said it expects to use any net proceeds for general corporate purposes, which may include the repayment or the retirement of existing debt.

The offering comes after Upstart reported third-quarter financial results last week that beat analyst expectations, showing strong lending volume growth and a return to positive adjusted EBITDA.

"Even without a significant boost from the macroeconomy, we're back in growth mode," said Dave Girouard, co-founder and CEO of Upstart.

Upstart guided for fourth-quarter revenue of approximately $180 million. The company anticipates adjusted EBITDA of approximately $5 million in the fourth quarter.

Several analysts also raised price targets on Upstart following the print. Piper Sandler upgraded Upstart and raised the price target to $85, Citigroup upgraded the stock and raised its target to $87, JPMorgan upgraded the stock and raised its target to $45 and Wedbush lifted its price target to $60.

UPST Price Action: Upstart shares were down 7.07% at $72 at the time of publication, according to Benzinga Pro.

Photo: courtesy of Upstart.