Telegram Secures $1.7 Billion to Boost Growth and Refinance Debt
Messaging platform Telegram has successfully raised $1.7 billion through a private placement of convertible senior notes. The offering, which closed in late May 2025, will primarily be used to repay existing bondholders and to support ongoing operational and product development efforts.
Deal Structure and Terms
- Size and Tranches: The offering comprised $700 million of 0.75% convertible senior notes due 2026 and $1.0 billion of 1.00% convertible senior notes due 2027.
- Coupon and Yield: The 2026 tranche carries a cash coupon of 0.75%, while the 2027 tranche pays 1.00%, reflecting strong investor demand even in a high-rate environment.
- Conversion Features: Notes are convertible into Telegram equity at a fixed conversion price of $30 per share, corresponding to an implied conversion premium of around 25% over the last secondary-market quote.
- Maturity and Put Options: Both tranches mature on June 1 of their respective years, with put options exercisable by investors beginning six months prior to maturity.
Use of Proceeds
According to the offering memorandum, approximately $1.5 billion of proceeds will repay existing high-yield notes issued in 2022. The remaining $200 million is earmarked as working capital to accelerate development of Telegram’s blockchain initiatives and enhance server infrastructure for its global user base, which exceeds 800 million monthly active users.
Technical Breakdown of the Convertible Notes
The convertible notes are structured as unsecured obligations, ranking pari passu with all of Telegram’s other unsecured and unsubordinated debt. Key technical specifications include:
- Trade Date and Settlement: Trade date was May 28, 2025, with T+2 settlement on May 30, 2025.
- Conversion Mechanics: Holders may convert notes based on a fixed conversion rate of 33.33 shares per $1,000 principal at or prior to maturity, subject to anti-dilution provisions.
- Make-Whole Adjustment: In the event of certain corporate events, conversion rate protections kick in to preserve value for noteholders.
- Call Provisions: Issuer call optionality begins May 1, 2026, for the 2026 notes and May 1, 2027, for the 2027 notes, provided the share price exceeds 130% of the conversion price.
Market Reaction and Pricing Dynamics
Primary-market investors praised the tight pricing of the deal, which priced at a 0.50% yield for the 2026 notes and a 0.70% yield for the 2027 notes—tight to initial guidance of 0.75%–1.25%. Secondary-market trading in Telegram’s existing notes tightened by 15–20 basis points immediately after the announcement.
“This deal underscores investors’ confidence in Telegram’s growth trajectory and its ability to execute against its blockchain roadmap,” said Judith Lin, credit strategist at Horizon Capital Partners.
Expert Analysis and Outlook
Industry analysts note that the low coupons reflect both the high credit quality implied by Telegram’s cash flow from its subscription and ad-revenue streams and the value investors place on potential equity upside via conversion. With interest rates near cycle highs, access to sub-1% financing is particularly notable.
Looking ahead, market watchers will assess how Telegram allocates the $200 million of net new capital. Planned priorities include scaling its proprietary layer-1 blockchain, The Open Network (TON), and investing in decentralized finance (DeFi) tooling to foster an ecosystem rivaling Ethereum and Solana.
Comparative Context
Comparable tech issuers have used convertible debt to balance leverage and equity dilution. For instance, in April 2025, gaming firm ByteWave issued $1.2 billion of 0.50% convertibles due 2028, while social media platform ChatterBox raised $900 million in a two-tranche convertible in 2024.
Conclusion
Telegram’s $1.7 billion convertible bond offering represents a strategic financing that refinances existing debt at lower all-in rates and provides additional capital for growth initiatives. The deal’s tight execution and favorable terms highlight strong investor appetite for high-quality, tech-oriented credit with embedded upside.