Fermi Inc. Announces $350 Million Convertible Senior Notes Offering
Fermi Inc. (NASDAQ:FRMI) disclosed that it will issue $350 million of senior convertible notes due July 15 2031. The notes will be offered to qualified institutional buyers under Rule 144A of the Securities Act of 1933, and the company has granted initial purchasers an option to purchase up to an additional $52.5 million aggregate principal amount, which must be settled within 13 days of the initial issuance date.
The company stated that the net proceeds from the offering will be used to enter into privately negotiated capped‑call transactions intended to offset potential share dilution arising from note conversion. Any remaining funds will be allocated for general corporate purposes. The notes are senior, unsecured obligations that rank ahead of any expressly subordinated indebtedness. Interest on the notes will be payable semi‑annually in arrears, and the notes will mature on July 15 2031 unless they are converted, redeemed, or repurchased earlier.
Fermi intends to enter into capped‑call transactions with the initial purchasers, their affiliates, and other financial institutions. These transactions are designed to reduce dilution to the company’s common stock upon conversion, subject to a predefined cap. Option counterparties or their affiliates may establish initial hedges by entering into derivative transactions or by purchasing shares of Fermi’s common stock concurrently with, or shortly after, the pricing of the notes; such activity could affect the market price of the company’s stock or the notes.
The notes and any shares issuable upon conversion have not been registered under the Securities Act and may not be offered or sold in the United States except pursuant to an applicable exemption from registration requirements.
In after‑hours trading on the Thursday following the announcement, Fermi’s shares fell 12%, reflecting market concerns about the dilution‑mitigation strategy and the financing terms.