Fermi Inc. prices $375M convertible notes at 5% due 2031

Fermi Inc. (NASDAQ: FRMI, LSE: FRMI) has priced an upsized offering of $375 million in 5.00% convertible senior notes due 2031, sold to qualified institutional buyers under Rule 144A, according to a company statement.

The initial purchasers have been granted an option to buy up to an additional $56.25 million in notes, which would bring the total offering to $431.25 million. The sale is scheduled to close on July 14, 2026.

The notes carry an initial conversion price of approximately $9.52 per share, representing a 30% premium over the closing stock price of $7.32 on July 9, 2026. The notes will bear interest at 5.00% per year, payable semiannually, and mature on July 15, 2031.

In connection with the offering, Fermi entered into capped call transactions with certain financial institutions. The capped call raises the effective conversion price to $14.64 per share, a 100% premium to the July 9 closing price, which the company says offsets dilution to shareholders below that level. The capped call transactions are expected to cost approximately $30.0 million, or $34.5 million if the overallotment option is fully exercised.

Fermi estimates net proceeds of approximately $362.25 million after discounts, commissions, and offering expenses, or approximately $416.81 million if the overallotment option is exercised in full. The company intends to use the remaining proceeds, after paying for the capped call transactions, for general corporate purposes.

The notes will not be redeemable before July 20, 2029, except under a cleanup provision if less than 10% of the original principal remains outstanding. After that date, the company may redeem the notes if its stock price has traded at or above 130% of the conversion price for at least 20 trading days within a 30 consecutive trading day period.

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