- Nebius Group plans to raise $4.5 billion by issuing convertible senior notes.
- When Nebius announced the sale and its intention to exchange notes for stock, its share price fell by 13%.
- Nebius has carried out its third convertible issue worth multiple billions of dollars within the past year.
The Amsterdam-headquartered Nebius, listed on Nasdaq as NBIS, announced plans to sell $4.50 billion in convertible senior notes, split into $2.75 billion due 2030 and $1.75 billion due 2034.
It also granted initial purchasers options on an additional $375 million of the 2030 tranche and $300 million of the 2034 tranche, potentially pushing the total above $5.17 billion. The notes are unsecured, senior obligations sold privately to qualified institutional buyers under Rule 144A.
Shares dropped 13%, going from $248.43 to $215.52. Even so, the stock is still up 197% so far this year.
Why did the market flinch
Investors were concerned about the exchange scheme that was attached to the notes.
Nebius intends to enter into private agreements with the holders of its 2.00% convertible notes maturing in 2029 and 3.00% notes maturing in 2031, exchanging some of these for Class A ordinary shares. The company’s filing highlighted the risk that those who accept the exchange might sell the shares on the open market or remove their related hedges.
Shareholders do not experience dilution immediately from convertible debt, but because of the exchange plan, some dilution will occur earlier, as funds that already hold notes tend to hedge by issuing new shares once the terms have been established. This causes short-term pressure on the stock price, yet it does not indicate any concerns about Nebius’ business.
Nebius has not introduced a new strategy
In March 2026, the company obtained $4.34 billion through convertible notes, and at that point, its chief communications officer, Tom Blackwell, stated that Nebius was well-funded to carry out capital spending plans ranging from $16 billion to $20 billion for 2026.
By the first quarter, the company had increased its full-year capital spending forecast to between $20 billion and $25 billion due to the rapid sale of capacity. In July 2026, it also arranged a $775 million senior facility secured by its GPU infrastructure and customer cash flows, employing an asset-backed financing method.
At the end of the second quarter of 2026, it had $8.04 billion in cash but spent $5.66 billion on property, equipment, and intangible assets during that quarter. Group revenue amounted to $582.3 million, representing an increase of 454% compared with the previous year, although the company is still not making a profit. The adjusted EBITDA margin rose to 45% from 24% the previous year, but it remains below the level of capital spending.
Nebius plans to fund about 60% of its growth with customer prepayments, mainly from Microsoft and Meta. The other 40% will come from a mix of equity and debt. These prepaid capacity agreements act as collateral, giving lenders and noteholders confidence that the infrastructure already has committed buyers.
According to its SEC filing, proceeds from the new notes will be used for data center construction, expansion of Nebius’ full-stack AI cloud platform, procurement of GPUs and other components, and general corporate purposes.
This financing approach started before March
Soon after closing its $17.4 billion deal with Microsoft in September 2025, Nebius raised $3 billion through convertible notes and Class A shares. Since then, it has received funding from several sources, including a $2 billion equity investment from NVIDIA, convertible note sales in March and August, a secured facility in July, and acquisitions such as the $643 million purchase of Eigen AI.
Each round has been backed by a market that expects demand for AI infrastructure to outpace supply.
The recent drop in the stock raises an important question: When does the speed of Nebius’ fundraising become the main risk for investors, rather than the AI cycle the money is meant to support?
