AST SpaceMobile, Inc. (NASDAQ: ASTS), the company building the first and only space-based cellular broadband network accessible directly by everyday smartphones, has announced a proposed private offering of $1.0 billion in convertible senior notes due 2034.
The offering is targeted exclusively at qualified institutional buyers under Rule 144A of the Securities Act of 1933, reflecting the highly specialized nature of the capital raise.
AST SpaceMobile also intends to grant initial purchasers an option to acquire up to an additional $150 million in aggregate principal amount of notes within a 13-day settlement window from the first issuance date.
The notes will be senior, unsecured obligations of the company, with interest paid semiannually in arrears and a maturity date of February 1, 2034.
Conversion terms allow AST SpaceMobile to settle in cash, shares of its Class A common stock, or a combination of both, at the company’s election upon conversion.
The interest rate, initial conversion rate, and other key terms will be determined at the time of pricing, leaving final economics subject to prevailing market conditions.
A portion of the net proceeds will be used to fund capped call transactions designed to reduce potential dilution to holders of the company’s Class A common stock.
The remaining proceeds are earmarked for growth initiatives, including securing additional orbital access, and potentially pursuing partnerships or acquisitions to further vertically integrate the business.
AST SpaceMobile specifically noted that additional vertical integration efforts would aim to reduce risks associated with reliance on third-party launch providers, a notable strategic priority as the company scales its constellation.
The company stated it currently does not have any understandings or agreements with respect to any such strategic transactions, signaling that the capital is being raised in advance of identified opportunities.
In connection with the capped call transactions, option counterparties or their affiliates are expected to enter into derivative positions or purchase Class A shares around the time of pricing, activity the company acknowledged could influence its stock price.
AST SpaceMobile serves today’s nearly 6 billion mobile subscribers globally, with its network designed to deliver 4G and 5G space-based broadband directly to standard, unmodified mobile devices without specialized hardware.
The notes have not been registered under the Securities Act or the laws of any other jurisdiction and may not be offered or sold in the United States absent an applicable exemption from registration requirements.
