Telegram Raises $1.7B Via Convertible Bonds: Bloomberg

Telegram has secured $1.7 billion by issuing five-year convertible bonds, aiming to refinance existing liabilities and push out repayment deadlines.

The messaging app, which now counts over 1 billion users, will use $955 million of the new funds to buy back bonds maturing in 2026, Bloomberg reports. The remaining $745 million gives the company fresh capital to bolster its operations or invest in growth.

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Investors in the new bonds will have a shot at converting their holdings into equity if Telegram goes public before the notes mature. In that scenario, they would be entitled to redeem at 80% of the initial public offering price.

The tender offer closed May 28, with settlement expected on June 5. CoinDesk previously reported the round drew interest from from both returning investors such as the world’s largest asset manager BlackRock and Abu Dhabi’s sovereign wealth fund Mubadala, as well as new entrants including hedge fund Citadel

The notes carry a 9% coupon, two percentage points above Telegram’s previous $2.35 billion bond issued in 2021.

Telegram passed $1 billion in revenue last year and holds over $500 million in cash reserves, excluding crypto, Bloomberg’s report adds.