AST SpaceMobile announces $1 billion convertible notes offering

AST SpaceMobile Inc. (NASDAQ: ASTS) announced its intent to offer $1 billion in convertible senior notes due 2036 in a private placement to qualified institutional buyers.

The satellite communications company plans to grant initial purchasers an option to buy up to an additional $150 million of notes, exercisable through February 20, 2026. The notes will be senior unsecured obligations that accrue interest payable semiannually and mature on April 15, 2036, unless converted or repurchased earlier.

The convertible notes can be converted into cash, Class A common stock, or a combination at the company's discretion. Interest rates, conversion rates and other terms will be determined when the offering is priced.

AST SpaceMobile stated it intends to use proceeds for general corporate purposes, including accelerating deployment of controlled spectrum bands globally, monetizing proprietary technology for artificial intelligence opportunities, enhancing investment in government space opportunities, reducing higher interest debt, and pursuing investments to accelerate its SpaceMobile service.

The company also announced separate registered direct offerings of Class A common stock. It plans to use those proceeds, along with cash on hand, to repurchase up to $50 million of existing 4.25% convertible senior notes due 2032 and up to $250 million of existing 2.375% convertible senior notes due 2032.

AST SpaceMobile expects to enter into privately negotiated transactions to repurchase up to $300 million principal amount of existing notes for cash concurrent with pricing of the new notes offering.

The completion of the convertible notes offering is not contingent on the registered direct offerings or existing note repurchases, according to the press release.

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