Compass, Inc. 8-K

What Happened
Compass, Inc. announced on January 8, 2026 that it priced a private placement of $850.0 million aggregate principal amount of 0.25% convertible senior notes due April 15, 2031 (the “Notes”), sold to qualified institutional buyers under Rule 144A. The company granted initial purchasers a 13‑day option to buy up to an additional $150.0 million aggregate principal amount. Compass also entered into privately negotiated capped call transactions tied to the shares underlying the Notes.

Key Details

• Principal amount: $850.0 million, with an initial purchaser option for an additional $150.0 million (13‑day option period).
• Interest & maturity: 0.25% annual interest; maturity April 15, 2031 (subject to earlier repurchase, redemption or conversion).
• Conversion: Initial conversion rate of 62.5626 shares of Class A common stock per $1,000 principal (≈ $15.98 per share), a ~35.0% premium to the Jan 7, 2026 closing price. If all $850M converted, ~53.18 million shares would be issuable (≈9.38 million more shares per $150M option).
• Capped calls: Counterparties to the capped calls include certain initial purchasers or affiliates; initial cap price $23.68 per share (100% premium to Jan 7, 2026 price), subject to customary adjustments.
• Security & use of proceeds: Notes are senior unsecured obligations, jointly and severally guaranteed by subsidiaries that guarantee Compass’s existing revolver. Net proceeds will be used for general corporate purposes, including (if the announced merger with Anywhere Real Estate Inc. closes) repayment of certain Anywhere indebtedness and payment of merger costs, and to fund the net cost of the capped calls.

Why It Matters
This transaction raises liquidity for Compass while limiting near‑term interest expense (0.25% coupon). The convertible structure and capped calls are intended to manage potential dilution and hedging costs, but conversion at the stated rate would create substantial new shares if conversions occur. Proceeds may be used to pay debt related to the previously announced Anywhere merger, linking this financing to that strategic transaction. The offering was conducted as a Rule 144A private placement to institutional buyers and includes forward‑looking risks called out in the filing.