Telegram Raises $1.7 Billion in Convertible Bonds for Debt Repayment and Growth

Telegram, a messaging platform, has successfully raised $1.7 billion through a convertible bond offering. The bonds, which carry a 9% coupon, were issued over a five-year period and closed on May 28. The proceeds from this offering will be used to retire existing debt and provide additional liquidity for the company's operations and growth.

Out of the total amount raised, $955 million will be allocated to repurchasing bonds that are due in 2026. The remaining $745 million will be used to support the platform's ongoing operations and expansion efforts. The new bonds offer investors the option to convert their holdings into equity if Telegram goes public before the bonds mature. In such a scenario, the notes would convert at a 20% discount to the IPO price.

The bond offering attracted a mix of returning investors, including BlackRock and Abu Dhabi’s Mubadala, as well as new participants. This diverse investor base reflects the confidence in Telegram's growth potential and financial stability.

Telegram's CEO, Pavel Durov, has emphasized the company's commitment to its core principles, balancing local legal compliance with its mission to protect users from oppressive governments or corporations. Durov confirmed that Telegram has been disclosing IP addresses and phone numbers of criminals to authorities since 2018. This process is part of the company's response to properly formed legal requests from authorities across most countries.

The bond offering comes at a time when Telegram is experiencing significant growth. The platform now boasts more than 1 billion users globally and crossed $1 billion in annual revenue last year. The company holds more than $500 million in cash, not including its crypto holdings, which further strengthens its financial position.

Telegram's ability to raise $1.7 billion in convertible bonds underscores its financial health and investor confidence. The funds will be instrumental in reducing the company's debt burden and providing the necessary resources for continued growth and innovation. As Telegram continues to expand its user base and revenue streams, it remains committed to its mission of providing a secure and private messaging platform for its users.