AST SpaceMobile plans $1B convertible notes offering due 2034

AST SpaceMobile, Inc. (NASDAQ: ASTS) announced a proposed private offering of $1.0 billion in convertible senior notes due 2034, targeting qualified institutional buyers under Rule 144A of the Securities Act of 1933.

The company also intends to grant initial purchasers an option to buy up to an additional $150 million in notes within a 13-day period following the initial issuance date.

The notes will be senior, unsecured obligations maturing on February 1, 2034, with interest paid semiannually. At AST SpaceMobile's election, the notes may be converted into cash, Class A common stock, or a combination of both. The interest rate, initial conversion rate, and other terms will be set at pricing.

AST SpaceMobile said it intends to use a portion of the proceeds to fund capped call transactions designed to reduce potential dilution to its Class A common stock. The remaining proceeds are earmarked for growth initiatives, securing additional orbital access, and potential partnerships or acquisitions to vertically integrate its business and reduce reliance on third-party launch providers. The company stated it currently has no agreements in place for any such transactions.

In connection with the offering, the company expects option counterparties to enter into derivative transactions or purchase Class A common stock to establish initial hedges, activity that could influence the market price of the stock or the notes.

The notes have not been registered under the Securities Act and may not be offered or sold in the United States absent an applicable exemption. This announcement is based on a press release issued by AST SpaceMobile.

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