INFORMATION CONTAINED IN THIS REPORT ON FORM 6-K
On March 2, 2021, Spotify USA Inc. (the “Issuer”), a wholly owned subsidiary of Spotify Technology S.A. (the
“Company”), issued $1,500 million principal amount of its 0% Exchangeable Senior Notes due 2026 (the “Notes”). The Notes were issued pursuant to, and are governed by, an indenture (the
“Indenture”), dated as of March 2, 2021, among the Issuer, the Company, as guarantor, and U.S. Bank National Association, as trustee (the “Trustee”). Pursuant to the purchase agreement among the Issuer, the
Company and the initial purchasers of the Notes, the Issuer granted the initial purchasers an option to purchase, for settlement within a period of 13 days from, and including, the date the Notes are first issued, up to an additional
$200 million principal amount of Notes. The Notes issued on March 2, 2021 include $200 million principal amount of Notes issued pursuant to the full exercise by the initial purchasers of such option.
The Notes will be the Issuer’s senior, unsecured obligations and will be (i) equal in right of payment with the Issuer’s future senior,
unsecured indebtedness; (ii) senior in right of payment to the Issuer’s future indebtedness that is expressly subordinated to the Notes; (iii) effectively subordinated to the Issuer’s future secured indebtedness, to the extent of
the value of the collateral securing that indebtedness; and (iv) structurally subordinated to all future indebtedness and other liabilities, including trade payables, and (to the extent the Issuer is not a holder thereof) preferred equity, if
any, of the Issuer’s subsidiaries. The Notes will be fully and unconditionally guaranteed, on a senior, unsecured basis, by the Company.
The Notes
will not bear regular interest, and the principal amount of the Notes will not accrete. However, special interest and additional interest may accrue on the Notes at a rate per annum not exceeding 0.50% upon the occurrence of certain events relating
to the failure to file certain reports with the U.S. Securities and Exchange Commission or to remove certain restrictive legends from the Notes. The Notes will mature on March 15, 2026, unless earlier repurchased, redeemed or exchanged. Before
December 15, 2025, noteholders will have the right to exchange their Notes only upon the occurrence of certain events. From and after December 15, 2025, noteholders may exchange their Notes at any time at their election until the close of
business on the second scheduled trading day immediately before the maturity date. The Issuer will settle exchanges by paying or delivering, as applicable, cash, ordinary shares of the Company or a combination of cash and ordinary shares of the
Company, at the Issuer’s election. The initial exchange rate is 1.9410 ordinary shares of the Company per $1,000 principal amount of Notes, which represents an initial exchange price of approximately $515.20 per ordinary share. The exchange
rate and exchange price will be subject to customary adjustments upon the occurrence of certain events. In addition, if certain corporate events that constitute a “Make-Whole Fundamental Change” (as defined in the Indenture) occur, then
the exchange rate will, in certain circumstances, be increased for a specified period of time.
The notes will not be redeemable prior to March 20,
2024, except in the event of certain tax law changes. The Notes will be redeemable, in whole or in part (subject to certain limitations), at the Issuer’s option at any time, and from time to time, on or after March 20, 2024 and on or
before the 40th scheduled trading day immediately before the maturity date, but only if the last reported sale price per ordinary share of the Company exceeds 130% of the exchange price on (i) each of at least 20 trading days, whether or not
consecutive, during the 30 consecutive trading days ending on, and including, the trading day immediately before the date the Issuer sends the related redemption notice; and (ii) the trading day immediately before the date the Issuer sends such
notice. In addition, the Issuer will have the right to redeem all, but not less than all, of the Notes if certain changes in tax law occur. The redemption price for any Notes called for redemption will be a cash amount equal to the principal amount
of the Notes to be redeemed, plus accrued and unpaid special and additional interest, if any, to, but excluding, the redemption date. Calling any Note for redemption will constitute a Make-Whole Fundamental Change with respect to that Note, in which
case the exchange rate applicable to the exchange of that Note will be increased in certain circumstances if it is exchanged after it is called for redemption.
If certain corporate events that constitute a “Fundamental Change” (as defined in the Indenture) occur, then, subject to a limited exception for
certain cash mergers, noteholders may require the Issuer to repurchase their Notes at a cash repurchase price equal to the principal amount of the Notes to be repurchased, plus accrued and unpaid special and additional interest, if any, to, but
excluding, the fundamental change repurchase date. The definition of Fundamental Change includes certain business combination transactions involving the Company and certain de-listing events with respect to
the Company’s ordinary shares.