Telegram to raise $1.5B in bond sale, Citadel joins BlackRock in backing the deal: WSJ

Key Takeaways

Telegram is raising $1.5 billion through a bond issue, backed by investors including Citadel and BlackRock.
The bond issue will help buy back previous debt as Telegram faces legal challenges in France.

Telegram, the popular messaging platform, is preparing to issue at least $1.5 billion in new bonds on Wednesday, having secured commitments from both new investors, including Citadel, and established bondholders such as BlackRock and Mubadala, The Wall Street Journal reported early Wednesday.

The bond will have a 5-year term at a 9% yield, according to the report. Proceeds from the bond offering will be used to buy back Telegram’s 2021 bonds, which mature in March 2026. About $400 million of that earlier debt has already been repurchased.

Investors will have the option to convert their debt into shares at a discount if Telegram pursues a public offering, though an IPO appears unlikely in the near term.

The deal signals that investors remain confident in Telegram’s financial trajectory and user growth, despite legal uncertainty around its founder, Pavel Durov.

Durov has faced preliminary charges in France for allegedly refusing to cooperate with investigations into illegal activity on the platform.

After being detained and investigated in France last year, in March, Durov was granted permission by an investigating judge to temporarily leave France.

In a statement post-return to Dubai, United Arab Emirates, where Telegram’s headquarters and operations are located, he stated that Telegram has not only met but also exceeded legal expectations in moderation, cooperation, and crime prevention.

Ahead of the bond offering, Telegram reported a $540 million profit in 2024, according to the Financial Times, which cited a company presentation shared with potential investors.

The profit marked a sharp turnaround from a $173 million loss the previous year, with revenue soaring to $1.4 billion, driven largely by premium subscriptions, advertising, and partnerships tied to the Ton blockchain ecosystem.

The announcement sparked a rally in Toncoin (TON), the crypto asset tied to The Open Network, which climbed 6% to nearly $3.2 shortly after the news, according to CoinGecko data.

TON has previously shown a quick reaction to developments involving Telegram and its CEO. Last August, the token plunged 18% following Durov’s arrest, only to rebound after his release.

Also on Wednesday, the TON Foundation announced it had appointed former Visa executive Nikola Plecas as vice president of payments to lead its global payments strategy.

Plecas will focus on enhancing payment capabilities within The Open Network (TON) and managing partnerships, particularly involving TON and Telegram, while also overseeing compliance.