With $NBIS (-3,66%) is heading south today after the first capital measure.
today announced the planned issue of senior convertible bonds with a volume of 3.75 billion US dollars. As the company announced in a press release, the offering will be made in a private placement to qualified institutional buyers. The company's share price, which is currently quoted at USD 129.85 and has a market capitalization of USD 32.85 billion, has risen by 359% in the past year.
The offering is divided into two tranches: a US$2.0 billion tranche maturing in 2031 and a US$1.75 billion tranche maturing in 2033. The company will grant the initial underwriter an over-allotment option to purchase up to an additional US$300 million of the 2031 tranche and US$262.5 million of the 2033 tranche within 13 days of issuance.
Nebius plans to use the proceeds to finance the growth of its business. This includes the construction and expansion of data centers, the development of AI cloud infrastructure, the expansion of data center locations and the procurement of components such as GPUs. The capital raising comes at a time when the company has a strong short-term liquidity (current ratio) of 3.08, where cash and cash equivalents exceed current liabilities. According to an analysis by InvestingProwhich provides 17 further ProTips for NBIS, analysts do not expect the company to be profitable this year. Despite current valuation concerns - the fair value analysis of InvestingPro indicates a possible Überbewertung of the stock - investors can get comprehensive insights via the Pro Research Report, which is available for NBIS and over 1,400 other US stocks.
The bonds are senior unsecured notes issued under the terms of the indenture with U.S. Bank Trust Company, National Association, as trustee. They bear interest on the original principal amount, with interest being paid semi-annually. Bondholders may convert their bonds under certain circumstances, and the company may settle the conversion with cash, Class A common stock or a combination of both.
The value of the bonds will accrete to 120% of their original principal amount by the respective maturity dates of March 15, 2031 and March 15, 2033. The conversion rates and prices are based on the original nominal value and not on the accrued value.
Nebius cannot call the bonds maturing in 2031 before March 20, 2029 and the bonds maturing in 2033 before March 20, 2030, except in the event of certain tax law changes. After these dates, the company may call the bonds if the price of its Class A share reaches 130% of the conversion price over a certain period.
The bonds and any shares issuable upon conversion will not be registered under the Securities Act of 1933 and will be offered only to qualified institutional buyers pursuant to Rule 144A.
