Telegram Plans $1.5 Billion Bond Sale With 9% Yield

Telegram, the widely-used messaging platform, is planning to issue at least $1.5 billion in new bonds on Wednesday. This move has garnered commitments from both new investors, including Citadel, and existing bondholders such as BlackRock and Mubadala. The bond will have a 5-year term with a 9% yield. The proceeds from this bond offering will be used to repurchase Telegram’s 2021 bonds, which are set to mature in March 2026. Approximately $400 million of that earlier debt has already been repurchased.

Investors will have the option to convert their debt into shares at a discount if Telegram decides to pursue a public offering, although an IPO does not appear imminent. This deal indicates that investors remain optimistic about Telegram’s financial trajectory and user growth, despite the legal uncertainties surrounding its founder, Pavel Durov. Durov has faced preliminary charges in France for allegedly refusing to cooperate with investigations into illegal activities on the platform. After being detained and investigated in France last year, Durov was granted permission by an investigating judge to temporarily leave France in March. Upon returning to Dubai, United Arab Emirates, where Telegram’s headquarters and operations are located, Durov stated that Telegram has not only met but also exceeded legal expectations in moderation, cooperation, and crime prevention.

Ahead of the bond offering, Telegram reported a $540 million profit in 2024. This marked a significant turnaround from a $173 million loss the previous year, with revenue soaring to $1.4 billion. This growth was driven largely by premium subscriptions, advertising, and partnerships tied to the Ton blockchain ecosystem. The bond sale is part of Telegram's broader strategy to refinance its debt and secure additional funding for its operations. By offering a 9% yield on the bonds, Telegram aims to provide a competitive return for investors while addressing its debt obligations. The involvement of major institutional investors like BlackRock and Citadel underscores the confidence in Telegram's financial health and future prospects.

The bond sale is expected to attract a mix of existing and new investors. Existing backers like BlackRock and Mubadala, along with new participants such as the US hedge fund firm Citadel, are anticipated to support the deal. The participation of Citadel, a prominent US hedge fund firm, adds to the credibility of the bond sale and signals strong interest from the investment community. The bond sale is a significant step for Telegram as it continues to grow and expand its services, positioning itself as a leading player in the messaging and communication sector. The bond sale is also expected to bring new investors to Telegram, further diversifying its investor base. One of the key attractions of this bond sale is the potential for investors to purchase shares in a future initial public offering (IPO) at a 20% discount. This discount mirrors the terms of previous bond sales and is likely to be a significant draw for investors looking to capitalize on Telegram's growth potential. The bond sale comes at a time when Telegram is expanding its services and user base, making it an attractive investment opportunity for institutional investors.