CoreWeave boosts size of convertible note offering
CoreWeave’s stock and bonds are well off their highs of the year, but investors seem to have a healthy appetite for its convertible notes.
The neocloud company said Tuesday morning that its $2 billion convertible note offering announced on Monday has been upsized to $2.25 billion. The boosted deal has the potential to be upsized further by another $337.5 million.
These notes, which mature on December 1, 2031, have a coupon of 1.75% and a conversion price of about $107.80 a share.
That’s around 25% above where it ended on Monday and 41% below its peak closing price, but also a level where the stock has traded within the past month.
Shares sank as much as 9.2% at their lows yesterday, but recovered to finish down 2.4%.
The company plans to spend about 13% of the proceeds (or a little less than $300 million) to enter into capped call transactions that limit any potential dilutive impact of this offering, with the remainder to be used for general corporate purposes.
CoreWeave arguably never took advantage of its very lofty equity price from June through October to raise money via equity, though one could argue that its failed bid to acquire Core Scientific in an all-stock deal was just that. So now, it’s raising more money through debt that could turn into equity.
