Nebius Group (NASDAQ:NBIS) completed a $5 billion convertible senior note offering on Wednesday, a transaction that nearly quadruples its trailing 12-month revenue of $1.36 billion. The deal, priced after an initial upsize, settles on August 24 with net proceeds of approximately $4.94 billion.
The offering includes two tranches: $3 billion of 2030 notes paying 0.50% interest, convertible at $313.46 per share (40% above Wednesday’s close of $223.90), and $2 billion of 2034 notes paying 4.50%, convertible at $324.65 (45% premium). Investors also hold an option for an additional $750 million, which could push total proceeds to $5.68 billion.
While the stated coupons appear low, the actual cost includes accretion. The 2030 notes require repayment of 110% of principal at maturity, while the 2034 notes require 125%, adding $300 million and $500 million respectively. Combined with cash interest of about $105 million annually, the total annual cost rises to roughly $258 million—19% of trailing revenue, compared to the 8% implied by coupons alone. This equates to an effective annual rate of 3.3% for the 2030 notes and 7.5% for the 2034 notes.
Conversion terms include potential dilution of up to 15.7 million new Class A shares (6% of the 271.9 million shares outstanding as of June 30) if the stock rises 40% or more. Nebius retains the option to settle conversions in cash, shares, or a combination of both.
Shares of Nebius fell about 10% following the announcement, reflecting investor scrutiny of the financing structure relative to the company’s revenue scale.
