TLDR
- Nebius Group prices $5B convertible notes to fund data center expansion.
- NBIS stock drops to $220 pre-market after closing 9.87% lower at $223.90.
- Nebius expects $4.94B in net proceeds, potentially rising to $5.68B.
- Funds will support data centers, GPU purchases, and infrastructure growth.
- Nebius will exchange $800M of existing notes for 15.8 million shares.
Nebius Group (NBIS) shares priced a $5 billion convertible note offering as the company accelerates spending on data center expansion. The deal increased from the previously announced $4.5 billion size and includes two separate note series. NBIS stock fell 9.87% to $223.90 before dropping another 1.74% to $220.00 pre-market.
Nebius Group Expands Convertible Note Offering
Nebius Group priced $3 billion of 0.50% convertible senior notes due in 2030. The company also priced $2 billion of 4.50% convertible senior notes due in 2034. Both offerings target qualified institutional buyers through a private Rule 144A transaction.
The company expects the offering to settle on August 24, subject to standard closing requirements. Nebius also granted purchasers options to acquire another $450 million of 2030 notes. They may also purchase another $300 million of 2034 notes within the permitted exercise period.
Nebius expects about $4.94 billion in net proceeds after fees and estimated offering costs. However, full exercise of the additional purchase options could lift net proceeds to about $5.68 billion. The enlarged financing gives Nebius more capital for its expanding infrastructure requirements.
Data Center Expansion Drives Capital Plans
Nebius plans to direct the proceeds toward continued business growth and large infrastructure projects. The company specifically identified data center construction, site expansion, and procurement of key computing components. It will also use part of the capital for broader corporate purposes.
The spending plan supports Nebius Group’s strategy to expand computing capacity across its growing data center footprint. Consequently, additional capital could help finance equipment purchases and new facility development. GPU procurement also remains a major part of the company’s planned expenditure program.
The notes will remain senior unsecured obligations and will pay interest twice each year. Interest payments will begin on February 15, 2027, under the respective note agreements. U.S. Bank Trust Company will serve as trustee for both note series.
NBIS Stock Faces Share Conversion Pressure
The 2030 notes carry an initial conversion price of about $313.46 per Class A share. That level represents a 40% premium to NBIS’s August 19 closing price of $223.90. Meanwhile, the 2034 notes carry a higher initial conversion price of approximately $324.65.
That 2034 conversion level represents a 45% premium over the same August 19 closing price. At maturity, accretion raises the effective conversion prices to about $344.81 and $405.82, respectively. Those levels imply effective conversion premiums of approximately 54% and 81.3%.
Nebius also agreed to exchange $800 million of existing convertible notes for about 15.8 million Class A shares. Participating holders may sell those shares or adjust related hedge positions in the market. Therefore, the exchange could add near-term pressure to NBIS shares despite strengthening Nebius Group’s long-term expansion funding.
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