Fermi raises $431M in convertible notes for AI campus project

Fermi Inc. (Nasdaq: FRMI) has closed an upsized offering of $431.25 million in 5.00% Convertible Senior Notes due 2031, according to a company statement. The offering included the full exercise of an option for an additional $56.25 million in notes by initial purchasers.

The notes carry a 5.00% annual interest rate and mature on July 15, 2031. The initial conversion price is approximately $9.52 per share, a 30% premium to Fermi's July 9, 2026 closing stock price. Net proceeds totaled approximately $416.81 million after deducting discounts, commissions, and estimated expenses.

Fermi entered into capped call transactions costing approximately $34.5 million, setting an effective conversion price of $14.64 per share, representing a 100% premium to the July 9, 2026 closing price. The company states this structure limits dilution to existing shareholders unless the stock price doubles.

The remaining proceeds are designated for general corporate purposes, including advancing Project Matador, a proposed energy and AI campus spanning 7,570 acres in the Texas Panhandle. The company says more than $1.4 billion has been invested in the site to date, and the project is expected to ramp to approximately 1.5 gigawatts through 2027, subject to binding tenant agreements.

Chief Financial Officer Rob Masson said the convertible structure aligns with the company's development timeline and supports ongoing tenant and strategic partnership negotiations.

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