AST SpaceMobile closed a $1.15 billion convertible notes offering at 1.625%, its lowest coupon ever, with less than 2% dilution.
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AST SpaceMobile raises $1.15B in convertible notes at 1.625% coupon
AST SpaceMobile closed a $1.15 billion convertible notes offering at 1.625%, its lowest coupon ever, with less than 2% dilution.
"This financing allows us to pursue an expanding universe of growth opportunities, continue vertical integration, and secure additional access to orbit for our space-based cellular network," Scott Wisniewski, President of AST SpaceMobile, said.
The offering consisted of $1.0 billion in aggregate principal amount of 1.625% convertible senior notes due 2034, plus the full exercise of the initial purchasers' option for an additional $150 million. AST SpaceMobile purchased a capped call hedge that raised the effective conversion price to $149.20 per share. The company held pro forma cash, cash equivalents, and restricted cash of more than $3.8 billion as of June 30.
Shares rose 10.9% to $63.70 on the news, giving the company a market capitalization of about $22.3 billion. The notes carry an effective dilution of less than 2%, with the conversion price well above ASTS's all-time high, CFO Andy Johnson said.
The company plans to use the proceeds to pursue growth opportunities, continue vertical integration, and secure additional launch capacity for its satellite network. AST SpaceMobile is building a space-based cellular broadband network designed to work directly with standard smartphones, targeting both commercial and government applications.
The notes give AST SpaceMobile the optionality to settle conversions in cash, shares of its Class A common stock, or a combination of both, further limiting potential dilution. The capped call transactions are designed to mitigate any dilution or cash obligations upon conversion.
The capital raise removes near-term financing uncertainty for AST SpaceMobile as it works toward deploying its satellite constellation. Investors will watch for updates on launch timelines and commercial service agreements with mobile network operators.
This article is for informational purposes only and does not constitute investment advice.
