Telegram raises $1.5 billion through bond issuance with 9% yield

Financial background and objectives of the bond issuance

The primary purpose of the bond issuance is to restructure debt from the 2021 bond issuance, which matures in March 2026. According to sources, Telegram used about $400 million in cash to buy back part of the old debt, and the $1.5 billion from the new issuance will be used to pay down the remaining debt. The highlight of the new bonds is the ability to convert into shares at a 20% discount if Telegram goes public in the future, creating an additional incentive for investors.

In 2024, Telegram recorded an impressive profit of $540 million on revenue of $1.4 billion, marking a dramatic reversal from a loss of $173 million in 2023. Forecasting for 2025, the company expects to achieve a profit of more than $700 million on expected revenue of $2 billion.

This growth comes from expanding revenue streams such as advertising, in-app digital gifts, and a platform for app and bot developers. This strong growth, coupled with a huge user base, has bolstered market confidence in Telegram, despite the risks associated with CEO Pavel Durov’s legal troubles.

Participation of major investors

The participation of BlackRock, Mubadala and Citadel in the deal is a strong signal of Telegram’s appeal in the financial markets. BlackRock, the world’s largest asset manager and an existing investor in Telegram’s bonds, continues to bet on the company’s long-term potential. Mubadala, the sovereign wealth fund of Abu Dhabi, also reaffirmed its commitment, while Citadel – a leading hedge fund – joined as a new investor, signaling the growing interest from traditional financial institutions in blockchain-related technology companies.

The participation of these institutions not only provided much-needed funding but also enhanced Telegram’s reputation in the capital markets. The bond’s 9% yield, significantly lower than the 2021 bond’s peak of 17.3% during CEO Durov’s legal troubles, shows that Telegram’s borrowing costs have improved significantly, reflecting the company’s growing financial stability.

Impact on blockchain ecosystem and Toncoin

The bond issuance also had a significant impact on the Telegram-related blockchain ecosystem, especially The Open Network (TON). Toncoin (TON), the token associated with Telegram, increased in price by more than 15% within 24 hours of the news of the deal, reaching a price of $3.43 with a market capitalization of $8.55 billion.

This growth was partly fueled by recent developments, including the TON Foundation appointing a former Visa executive to lead its global payments strategy, as well as the integration of xAI’s Grok artificial intelligence into the Telegram app through a $300 million deal.

Furthermore, the tokenization of $500 million worth of Telegram bonds on the TON network through the Telegram Bond Fund (TBF) by tokenization company Libre is a major step forward in the real-world assets (RWA) space.

This allows institutional investors to access institutional-grade yield products via blockchain, while opening up opportunities to use tokenized bonds as collateral in TON’s DeFi ecosystem.

This combination of traditional finance and blockchain technology not only strengthens Telegram's position in the technology sector but also drives innovation in decentralized finance.

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Compiled and analyzed by HCCVenture

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