Convertible Senior Notes

3 Months Ended

Mar. 31, 2019

Convertible Senior Notes—On July 23, 2018, the Company issued $143,750 aggregate principal amount of Notes.The Notes are senior, unsecured obligations of Redfin, and bear interest at a fixed rate of 1.75% per year, payable semi-annually in arrears on January 15 and July 15. The Notes mature on July 15, 2023, unless earlier repurchased, redeemed or converted. As of March 31, 2019, no conversion events have occurred. Redfin will settle conversions of the Notes by paying or delivering, as the case may be, cash, shares of its common stock, or a combination of cash and shares of its common stock, at its election. The Company has the ability, and intends, to settle any conversions solely in cash.

The Notes consisted of the following:



	March 31, 2019			December 31, 2018
Principal	$	143,750		$	143,750
Less: debt discount, net of amortization	(25,307		)	(26,636		)
Less: debt issuance costs, net of amortization	(3,349		)	(3,528		)
Net carrying amount of the Notes	$	115,094		$	113,586

The total estimated fair value of the Notes as of March 31, 2019 and December 31, 2018 was approximately $138,998 and $117,875, respectively, based on the closing trading price of the Notes on last day of trading for the period. The fair value has been classified as Level 2 within the fair value hierarchy given the limited trading activity of the Notes.

The following table sets forth total interest expense recognized related to the Notes for the period presented:



	Three months ended March 31, 2019
Amortization of debt discount	$	1,329
Amortization of debt issuance costs	178
Total amortization of debt issuance costs and accretion of equity portion	1,507
Contractual interest expense	629
Total interest expense related to the Notes	$	2,136

Effective interest rate of the liability component	7.25		%