SpaceX supplier STMicroelectronics plans $1.5 billion convertible bond sale

STMicroelectronics plans to raise $1.5 billion through a convertible bond sale, according to reporting on Tuesday, as the European chipmaker moves to refinance debt and take advantage of a strong share price.

The company is offering two tranches of senior unsecured bonds that can be converted into new or existing ordinary shares. The notes have five- and seven-year maturities, with each tranche set at a minimum size of $500 million.

Proceeds from the sale will be used in part to redeem $750 million of zero-coupon convertible bonds due in 2027. The rest will go toward general corporate purposes.

Why it matters

The deal gives STMicroelectronics a way to raise cash at relatively low coupon levels because investors have been willing to fund the company on the back of its stock performance. The Wall Street Journal reported that the 2031 bonds would carry an annual interest rate between 0% and 0.5%, while the 2033 bonds would pay between 0.625% and 1.125%.

STMicroelectronics shares have nearly tripled this year, helped by investor enthusiasm for companies with exposure to artificial intelligence. MarketWatch reported that the stock fell about 3% after the convertible announcement, even though it remained up 196% for the year.

Next steps

Settlement for the bonds is expected around June 23, 2026. Final pricing and the exact allocation between the two tranches were not yet confirmed in the coverage reviewed.

STMicroelectronics is also a supplier to SpaceX and Tesla, adding to the market attention around the financing move.