Telegram has successfully raised $1.7 billion by issuing five-year convertible bonds, designed primarily for refinancing existing debts and extending repayment timelines.

The app, which boasts over 1 billion users, will allocate $955 million to buy back bonds maturing in 2026, as reported by Bloomberg. The remaining $745 million will provide the company with fresh capital to enhance its operations and pursue growth.

Key Points:

• The new bond investors can convert their investments into equity if Telegram opts to go public prior to the bonds maturing.
• In such a case, the redemption price will be set at 80% of the initial public offering price.

The tender offer closed on May 28, and the settlement is anticipated on June 5. Notably, interest in this round came not just from existing investors like BlackRock and Mubadala, but also new entrants such as Citadel.

The bonds carry a 9% coupon, a slight increase from the previous $2.35 billion bond issued in 2021. Telegram reported revenues exceeding $1 billion last year and holds over $500 million in cash reserves, excluding cryptocurrencies.