Cybersecurity firm Zscaler Inc has announced the pricing of a $1.5 billion private offering of convertible senior notes due in 2028. The notes, which carry a zero percent interest rate, will be offered exclusively to qualified institutional buyers under Rule 144A of the Securities Act.

According to the company, the offering also includes a 13-day option for initial purchasers to buy up to an additional $225 million in notes, which could bring the total to $1.725 billion. The notes will mature on July 1, 2028, unless earlier repurchased, redeemed, or converted in accordance with their terms.

Zscaler intends to use the net proceeds for general corporate purposes, which may include working capital, capital expenditures, potential acquisitions, and repayment of existing debt. The move comes amid growing demand for cloud-native security platforms as enterprises accelerate digital transformation and remote work models.

The notes will be convertible into cash, Zscaler’s Class A common stock, or a combination of both, at the company’s election. The conversion price and other terms have been set to provide flexibility for investors and minimize dilution for existing shareholders. In addition, Zscaler retains the right to redeem the notes under certain conditions prior to maturity.

Despite a slight dip in premarket trading following the announcement, market analysts say the zero-coupon structure suggests strong investor confidence in Zscaler’s long-term growth trajectory. The company’s stock has seen significant gains this year, buoyed by robust demand for its Zero Trust Exchange platform and ongoing expansion in global markets.

Zscaler’s latest move reflects a broader trend among tech firms leveraging convertible debt to secure non-dilutive capital while maintaining financial agility.