Company Dreaming of Satellite Communication Secures Long-Term Funding with $1 Billion Convertible Bonds

AST SpaceMobile, Inc. (“ASTS”) has entered into a debt agreement with U.S. Bank Trust Company National Association as trustee, under which it may issue up to $1.0 billion (approximately KRW 1.3 trillion) aggregate principal amount of 2.25% convertible senior notes due April 15, 2036.

The notes include customary provisions such as a conversion feature into Class A common stock, an early redemption option, a change-of-control put right, and default clauses.

In the Form 8-K filed concurrently, ASTS significantly expanded its risk factors, emphasizing that large-scale financing for its Block 2 satellite constellation, the $550 million (approximately KRW 700 billion) Ligado spectrum transaction, loan agreements with UBS and Sound Point, and potential regulatory and litigation risks could materially affect its launch contracts and the viability of its business.

On February 12, the company confirmed terms for the offering of $1.0 billion of 2.25% notes due 2036, and stated it plans to use the net proceeds to reduce interest expense by repaying approximately $300 million of existing notes due 2032 in cash and newly issued shares.

Since announcing the new convertible notes, ASTS’s share price has pulled back, even as the company continues to expand hardware for its commercial satellite network—having completed deployment of its large commercial satellite “BlueBird 6” and preparing for the additional launch of “BlueBird 7” later this month.

Headquartered in Midland, Texas, ASTS is a satellite manufacturer and operator aiming to build a space-based cellular broadband network that directly connects standard smartphones in coverage gaps worldwide with 4G and 5G services, all without ground base stations.

The direct-to-device satellite communications market is in an early growth stage, characterized by partnerships between low-Earth-orbit operators such as SpaceX’s Starlink and mobile carriers; key variables include substantial capital investment, global regulatory approvals, and securing spectrum.