BlackRock Backs Telegram’s $1.5B Bond Deal With 9% Yield, IPO Discount Perks

Key Takeaways

• Telegram will reportedly issue fresh bonds worth $1.5 billion.
• The money will be used to buy back existing bonds that mature next year.
• Participants in the sale include Citadel, which joins existing investors BlackRock and Mubadala Investment Company.

Telegram is set to issue $1.5 billion in corporate bonds to refinance debt from a previous issuance in 2021.

Existing Telegram bondholders, including BlackRock, are among investors in the latest bond sale, which comes with the option to convert debt to shares if the company goes public.

Telegram Refinances Bond Debt

According to the Wall Street Journal , Telegram will use money raised from the latest sale to pay back the remaining debt from its debut $1 billion bond issuance in 2021.

Those bonds, which are due to mature in March 2026, returned a 7% annual coupon to investors. Meanwhile, the fresh bonds will pay out a 9% annual yield.

BlackRock, Major Investors Back Telegram

Investors in Telegram’s initial 2021 bond offering included private individuals, the U.S. asset manager BlackRock and Mubadala Investment Company, one of Abu Dhabi’s sovereign wealth funds.

BlackRock and Mubadala are also participating in the latest sale alongside new investors, including Citadel, the Journal reported.

Telegram IPO Timeline

Telegram CEO Pavel Durov has been teasing the prospect of an initial public offering (IPO) since early 2024.

However, Durov’s arrest in Paris last year, the ensuing investigation and ongoing market volatility have apparently delayed the company’s initial timeline.

Durov was arrested on suspicion of failing to prevent the dissemination of child sexual abuse material, drug trafficking, and other illegal activities on Telegram.

According to a Calcalis report , Telegram’s pitched potential investors in the latest bond sale with a plan to covert debt to equity over a five year term.

Meanwhile, the Journal reported that investors will have the option to convert outstanding bonds to shares at a discounted rate if the company undergoes an IPO before they mature.