Grab prices $1.5b convertible notes offering

It launched a $273.5m share buyback.

Grab Holdings Limited has announced the pricing of an upsized $1.5b offering of zero coupon convertible senior notes due 2030, an increase from the previously planned $1.25b.

The company plans to use the proceeds for general corporate purposes, to maintain strategic flexibility including potential acquisitions, and to fund share repurchases.

This includes fully utilizing the remaining $274m under its $500m share repurchase program announced in February 2024, with additional repurchases possible if authorized by its board.

The notes will mature on 15 June 2030, and will not bear regular interest. Holders will not be able to convert the notes until after a 40-day period from the issue date. After that, the notes can be converted into Grab’s Class A Ordinary Shares, cash, or a combination of both, at the company’s discretion.

The initial conversion rate is 152.6252 Class A Ordinary Shares per $1,000 principal amount of notes, equivalent to a conversion price of approximately $6.55 per share, which represents a 40% premium over Grab’s closing share price of $4.68 on 10 June.

The conversion rate is subject to adjustment based on certain events.

Beginning 21 June 2028, Grab may redeem the notes for cash if its stock price stays at or above 130% of the conversion price for 20 out of 30 consecutive trading days.

The company also has the right to redeem all notes if less than 10% of the original amount remains outstanding or if there are significant changes in tax law.

Noteholders will have the option to require Grab to repurchase their notes at full principal value on 15 June 2028, or upon the occurrence of specific corporate events. In some cases, such as redemptions or fundamental changes, Grab may increase the conversion rate for holders who choose to convert.

Alongside the offering, Grab will repurchase approximately $273.5m of its Class A Ordinary Shares in privately negotiated, off-market transactions at $4.68 per share—the stock’s closing price on 10 June.

The repurchase will be conducted through one of the offering’s initial purchasers or affiliates and is intended to support hedging by note investors.