Item 1.01. Entry Into a Material Definitive Agreement.
Indenture and Notes
On September 18, 2025, Oscar Health, Inc. (the “Company”) issued $410,000,000 aggregate principal amount of its 2.25% Convertible Senior Subordinated Notes due 2030 (the “Notes”). The Notes were issued pursuant to, and are governed by, an indenture (the “Indenture”), dated as of September 18, 2025, between the Company and U.S. Bank Trust Company, National Association, as trustee (the “Trustee”). Pursuant to the purchase agreement between the Company and the representatives of the initial purchasers of the Notes, the Company 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 $55,000,000 aggregate principal amount of Notes. The Notes issued on September 18, 2025 include $55,000,000 aggregate principal amount of Notes issued pursuant to the full exercise by the initial purchasers of such option.
The net proceeds from the offering are approximately $395.8 million after deducting the initial purchasers’ discounts and commissions and certain other estimated offering expenses. The Company used approximately $34.4 million of the net proceeds to fund the cost of entering into the capped call transactions described herein. The Company intends to use the remainder of the net proceeds from the offering for general corporate purposes, including to support future expansion fueled by strategic initiatives focused on AI, lowering the cost of care, and enhancing consumer healthcare experiences. The funds will also support additional growth opportunities, including the potential extension of enhanced premium tax credits.
The Notes will be the Company’s unsecured indebtedness and will be (i) equal in right of payment with the Company’s existing and future unsubordinated indebtedness (other than the Company’s “Designated Senior Indebtedness” (as defined in the Indenture)); (ii) junior in right of payment to the Company’s existing and future Designated Senior Indebtedness in the manner provided in the Indenture; (iii) effectively subordinated to the Company’s existing and future secured indebtedness, to the extent of the value of the collateral securing such indebtedness; and (iv) structurally subordinated to all existing and future indebtedness and other liabilities, including trade payables, and (to the extent the Company is not a holder thereof) preferred equity, if any, of the Company’s subsidiaries.
The Notes will accrue interest at a rate of 2.25% per annum, payable semi-annually in arrears on March 1 and September 1 of each year, beginning on March 1, 2026. The Notes will mature on September 1, 2030, unless earlier repurchased, redeemed or converted. Before June 1, 2030, noteholders will have the right to convert their Notes only upon the occurrence of certain events. From and after June 1, 2030, noteholders may convert 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 Company will settle conversions by paying or delivering, as applicable, cash, shares of its class A common stock or a combination of cash and shares of its class A common stock, at the Company’s election. The initial conversion rate is 40.2946 shares of the Company’s class A common stock per $1,000 principal amount of Notes, which represents an initial conversion price of approximately $24.82 per share of the Company’s class A common stock. The conversion rate and conversion 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 conversion rate will, in certain circumstances, be increased for a specified period of time.
The Notes will be redeemable, in whole or in part (subject to certain limitations described below), at the Company’s option at any time, and from time to time, on or after September 6, 2028 and on or before the 25th scheduled trading day immediately before the maturity date, but only if (i) the Notes are “Freely Tradable” (as defined in the Indenture) as of the date the Company sends the related redemption notice and all accrued and unpaid additional interest, if any, has been paid in full as of the most recent interest payment date occurring on or before the date the Company sends such notice; and (ii) the last reported sale price per share of the Company’s class A common stock exceeds 130% of the conversion price on (1) 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 Company sends such redemption notice; and (2) the trading day immediately before the date the Company sends such redemption notice. However, the Company may not redeem less than all of the outstanding Notes unless at least $100.0 million aggregate principal amount of Notes are outstanding and not called for redemption as of the time the Company sends the related redemption notice. The redemption price will be a cash amount equal to the principal amount of the Notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date. In addition, calling any Note for redemption will constitute a Make-Whole Fundamental Change with respect to that Note, in which case the conversion rate applicable to the conversion of that Note will be increased in certain circumstances if it is converted 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 Company to repurchase their Notes at a cash repurchase price equal to the principal amount of the Notes to be repurchased, plus accrued and unpaid 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 class A common stock.
