Shares of Broadcom Inc. (AVGO) - Get Report fell in after-hours trading Tuesday after the company announced a $3 billion offering of preferred shares.

The stock lost $8.81, or 3.1%, to $273.50.

The company said in a statement that the net proceeds from the offering will be used "to repay a portion of the outstanding borrowings under Broadcom's existing term loan facilities on a pro rata basis."

The mandatory convertible preferred shares will automatically convert into a variable number of shares of Broadcom's common stock on the mandatory conversion date of Sept. 30, 2022. Conversion details will be determined when the offering is priced.

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