Nebius says its $5 billion convertible underscores data centre demand

AMSTERDAM, Aug 20 (Reuters) - Nebius Group NBIS.O said on Thursday its $5 billion convertible bond was one of the largest on record and reflected strong demand for AI services and data centre capacity, despite recent jitters over the sector's huge financing needs.

Amsterdam-based Nebius, which sells AI services to tech firms and data centre capacity to customers including Meta META.O and Microsoft MSFT.O, raised the size from $4.5 billion late on Wednesday and the total could be increased to $5.75 billion if buyers exercise all options.

"We think it's one of the largest, and the largest in recent history, in the corporate convertible world," Nebius chief communications officer Tom Blackwell told Reuters, adding that the firm's total convertible debt is now around $12 billion.

Proceeds of the new offer, led by Goldman Sachs and JPMorgan, will be used to fund the company's data centre buildout and further develop its AI services offerings.

Nebius' data centres are based around GPUs made by Nvidia NVDA.O, which owns a stake of around 9.3% in the company.

The convertible debt offering includes $3 billion of notes due 2030 at 0.5% and $2 billion in 2034 at 4.5%. The bonds can be converted at stock prices ranging from $313 to $325, or a premium of more than 40% to the current price, Nebius said.

Nebius' volatile stock price, which has more than doubled this year, fell nearly 10% on Wednesday when it announced a deal to swap $800 million of previously issued convertible bonds for 15.8 million shares, representing a dilution of roughly 5.5%.

Its shares were down 1.7% at $220.10 on Thursday.

Nebius, which raised its only non-convertible debt in July in the form of a $775 million loan, last week reported a second quarter net loss of $190 million on sales that rose fivefold to $582 million, beating estimates.