WASHINGTON:- Music streaming giant Spotify has raised $1.0 billion in convertible debt from investors, with strict conditions, the Wall Street Journal reported late Tuesday. Private-equity firm TPG, hedge fund Dragoneer Investment Group and clients of Goldman Sachs are taking part in the deal, the paper said, citing people familiar with the transaction. Convertible debt are bonds that can be exchanged for stock. If Spotify holds a public offering in the next year, TPG and Dragoneer will be able to convert the debt into equity at a 20 percent discount to the listing price, the Journal reported.–AFP

Spotify will pay annual interest starting at five percent, increasing by one percentage point every six months until the company goes public, or it hits 10 percent, it added. Spotify was valued at $8.2 billion in June, when Finnish-Swedish telecoms operator TeliaSonera bought a 1.4 percent stake.