Americas Structured Equity Issue: AST SpaceMobile’s US$1.15bn 10-year convertible bond
Space odyssey
AST SpaceMobile’s visits to the equity-linked market culminated in October with a US$1.15bn 10.25-year convertible bond, the third in 2025 from the space-based telecoms company and the longest-dated CB in the US in more than a decade.
The financings provided much-needed capital by effectively issuing equity at a premium, with the October CB providing long-dated debt. The journey was so fast it required an unconventional means of selling stock to take out the initial CB issued in January.
Lead-left bookrunner UBS priced the CB on an overnight basis at a 2% coupon and 22.5% conversion premium, the midpoint of talk, following a two-day wall-cross. Simultaneously, the bank raised US$161.6m from a registered direct sale of stock that was used to repurchase at a premium US$50m principal of the 4.25% CB issued in January.
“The registered direct offering was a solution to give investors freely tradable stock within the legal constraints we were facing,” said Steve Studnicky, co-head of Americas ECM at UBS.
Put simply, the 4.25% CB was unseasoned and therefore any stock given as consideration to repurchase the bonds would also be unseasoned, limiting investors’ ability to sell on the open market.
That was a repeat of what AST did in July when it issued a US$575m 2.375% CB and repurchased US$360m principal of the 4.25% paper at a steep premium with proceeds from an RDO.
The refreshed capital structure has US$50m of the 4.25% notes maturing in January 2032 that are convertible at US$26.99, US$575m of the 2.375% notes maturing in October 2032 that are convertible at US$72.07 and US$1.15bn 2% notes maturing in January 2036 that are convertible at US$96.29.
In addition to the CBs, AST raised US$675m from the sale of 19m shares through at-the-market stock sales in the first nine months of 2025.
AST entered 2025 with a US$6.3bn market capitalisation and by late November it was three times that – obviously not entirely due to capital markets but not possible without innovative ECM financing.
“Being able to fund it with equity meant we could maximise proceeds in the offering and not consume our valuable cash,” said AST president and chief strategy officer Scott Wisniewski.
The 10.25-year tenor is the longest for 11 years – and all the rarer as an overnight deal – quite a feat for a low-revenue, lossmaking company and a necessity after it signed a decade-long Middle East service contract.
“We view ourselves as an infrastructure company,” Wisniewski said. “Similar to what you see in [mobile] towers or AI data centres. We wanted long-term capital to match the duration of contracts we have signed.
“This is usually something you see in the investment-grade bond market.”