Redemption price percent

[Table of Contents](#i5b8426ad342a427bafdce79a90546c91_7)Etsy, Inc.Notes to Consolidated Financial StatementsThe Company may redeem all or any portion of the 2021 Notes, at the Company’s option, subject to partial redemption limitations, on or after June 20, 2025, if the last reported sale price of the Company’s common stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive), including the trading day immediately preceding the date on which the Company provides notice of redemption, during any 30 consecutive trading day period ending on, and including, the trading day immediately preceding the date on which the Company provides notice of redemption at a redemption price equal to 100% of the principal amount of the 2021 Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date.The Notes are general unsecured obligations of the Company. The Notes rank senior in right of payment to all of the Company’s future indebtedness that is expressly subordinated in right of payment to the Notes; rank equal in right of payment with all of the Company’s liabilities that are not so subordinated; are effectively junior to any of the Company’s secured indebtedness; and are structurally junior to all indebtedness and liabilities (including trade payables) of the Company’s subsidiaries.Interest ExpenseInterest expense, which consists of coupon interest and amortization of debt issuance costs, related to each of the Notes for the periods presented below was as follows (in thousands):

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| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | Three Months Ended  September 30, |  | Nine Months Ended  September 30, |
|  | 2022 |  | 2021 |  | 2022 |  | 2021 |
| 2021 Notes | $ | 1,100  |  |  | $ | 1,100  |  |  | $ | 3,300  |  |  | $ | 1,318  |  |
| 2020 Notes | 502  |  |  | 502  |  |  | 1,505  |  |  | 1,505  |  |
| 2019 Notes | 497  |  |  | 497  |  |  | 1,489  |  |  | 1,489  |  |
| 2018 Notes | —  |  |  | —  |  |  | —  |  |  | 44  |  |
| Total interest expense | $ | 2,099  |  |  | $ | 2,099  |  |  | $ | 6,294  |  |  | $ | 4,356  |  |

Fair Value of NotesThe estimated fair value of each of the Notes was determined through inputs that are observable in the market, and are classified as Level 2. See “Note 7—Fair Value Measurements” for more information regarding the fair value of the Notes. Capped Call TransactionsThe Company used a portion of the net proceeds from each of the Notes offerings to enter into separate privately negotiated capped call instruments (the 2018, 2019, 2020, and 2021 capped call instruments collectively referred to as the “Capped Call Transactions”) with certain financial institutions, initial purchasers, and/or their respective affiliates. The Capped Call Transactions are expected generally to reduce the potential dilution and/or offset the cash payments the Company is required to make in excess of the principal amount of the Notes upon conversion of the Notes in the event that the market price per share of the Company’s common stock is greater than the strike price of the Capped Call Transactions with such reduction and/or offset subject to a cap. Collectively, the Capped Call Transactions cover, initially, the number of shares of the Company’s common stock underlying the respective Notes, subject to anti-dilution adjustments substantially similar to those applicable to the Notes.The initial terms of the Company’s Capped Call Transactions are presented below:

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|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Capped Call Transactions |  | Maturity Date |  | Initial Cap Price per Share |  | Cap Price Premium |
| 2021 Capped Call Transactions |  | June 13, 2028 |  | $ | 340.42  |  |  | 100  | % |
| 2020 Capped Call Transactions |  | September 1, 2027 |  | 327.83 |  | 150  | % |
| 2019 Capped Call Transactions |  | October 1, 2026 |  | 148.63 |  | 150  | % |
| 2018 Capped Call Transactions |  | March 1, 2023 |  | 52.76 |  | 100  | % |

  
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