AST SpaceMobile plans $500 million convertible notes offering

MIDLAND, Texas - AST SpaceMobile, Inc. (NASDAQ:ASTS), a space-based cellular broadband network developer with a market capitalization of $20.28 billion, announced Thursday its intention to offer $500 million in convertible senior notes due 2032 to qualified institutional buyers under Rule 144A of the Securities Act. According to InvestingPro data, the company’s stock has delivered an impressive 260.94% return over the past year.

The space-based cellular broadband network developer said it will grant initial purchasers an option to buy up to an additional $75 million in notes within a 13-day period after the notes are first issued.

The notes will be senior, unsecured obligations with semiannual interest payments, maturing on October 15, 2032, unless converted, redeemed, or repurchased earlier. They will be convertible into cash, AST SpaceMobile’s Class A common stock, or a combination at the company’s discretion. Interest rate and conversion terms will be determined upon pricing.

AST SpaceMobile plans to use part of the proceeds to fund capped call transactions, which are designed to reduce potential dilution to Class A common stock upon note conversion. The remainder will go toward general corporate purposes.

In a separate announcement, the company revealed plans for a registered direct offering of Class A common stock. Proceeds from this offering would be used to repurchase up to $135 million of its existing 4.25% convertible senior notes due 2032.

The company noted that the notes offering is not contingent on the registered direct offering or existing notes repurchase, though the latter two transactions are cross-conditional.

The notes and potential shares issuable upon conversion will not be registered under the Securities Act or other securities laws, limiting their sale to exempted transactions.

This announcement is based on a company press release statement and does not constitute an offer to sell or solicitation to buy securities.

In other recent news, AST SpaceMobile has announced plans to repurchase up to $135 million of its 4.25% convertible senior notes due 2032 while offering shares of Class A common stock to participating noteholders. This move is part of a registered direct offering intended to fund the note repurchases. Additionally, AST SpaceMobile plans to offer $500 million in convertible senior notes due 2032 in a private placement, with an option for initial purchasers to buy an additional $75 million in notes. The proceeds from this offering will partly fund capped call transactions to reduce potential dilution, with the remainder allocated for general corporate purposes.

Furthermore, Clear Street has initiated coverage on AST SpaceMobile with a Buy rating, citing the company’s long-term mobile growth potential with its patented satellite technology. In another development, AST SpaceMobile has secured $100 million in non-dilutive equipment financing to support its manufacturing and network deployment goals. This financing, led by Trinity Capital Inc., provides long-term liquidity through 2031, with $25 million already drawn at closing against previously purchased equipment. These recent developments reflect AST SpaceMobile’s strategic financial maneuvers and growth opportunities.

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