AST SpaceMobile, Inc., a company based in Midland, has announced its intention to offer $850 million in convertible senior notes due in 2036. The company is developing what it claims to be the world’s first space-based cellular broadband network that can be accessed directly by everyday smartphones.
According to a news release from AST SpaceMobile, the private offering will target qualified institutional buyers under Rule 144A of the Securities Act of 1933. There is an option for initial purchasers to acquire an additional $150 million in notes. These notes will be senior and unsecured obligations of AST SpaceMobile, accruing interest payable semiannually. They are convertible into cash, shares of the company’s Class A common stock, or a combination thereof at the company’s discretion. The interest rate, conversion rate, and other key terms will be determined at the time of pricing.
The release states that proceeds from this offering will support general corporate purposes, including funding for the deployment of AST SpaceMobile’s global satellite constellation and expansion into new strategic markets. This initiative is part of the company’s broader strategy to accelerate its SpaceMobile Service, which aims to provide broadband connectivity directly from space to mobile devices without requiring specialized equipment.
In a related development, AST SpaceMobile has also announced plans for a registered direct offering of its Class A common stock. The proceeds from this offering, along with existing cash reserves, will be used to repurchase up to $50 million of its 4.25% convertible senior notes due in 2032. The company emphasizes that these transactions are separate but cross-conditional and none are contingent upon the completion of others.