BigBear.ai Holdings, Inc. (NYSE:BBAI), a technology company with a market capitalization of $1.05 billion and impressive six-month return of 179%, has announced the exchange of approximately $182.3 million in convertible senior notes due in 2026 for an equal principal amount of new 6.00% convertible senior secured notes due in 2029.
This transaction, which took place on Monday, included an additional cash payment of roughly $0.4 million to cover accrued and unpaid interest on the exchanged notes. According to InvestingPro analysis, the company's stock has shown significant momentum recently, though current valuations suggest it may be trading above its Fair Value.
The new 2029 notes, accompanied by cash interest payments, carry an interest rate of 6.00% per annum, or 7.00% if the company opts to pay interest in kind with shares of its common stock. This interest rate could increase to 9.00% or 10.00% per annum under certain liquidity conditions.
The notes, which are set to mature on December 15, 2029, are guaranteed and secured by substantially all assets of BigBear.ai and its guarantors. With annual revenue of $155 million and a current ratio of 2.06, InvestingPro data shows the company maintains healthy liquidity despite not being profitable in the last twelve months.
Notably, the 2029 notes are redeemable at the company's discretion after December 27, 2025, under specific conditions. The notes are also subject to conversion into BigBear.ai's common stock at a rate of 281.4491 shares per $1,000 principal amount, translating to an initial conversion price of $3.5530 per share.
In addition to the exchange, BigBear.ai terminated its existing senior secured revolving credit facility, which had no outstanding borrowings at the time of termination. This move is part of the company's broader strategy to streamline its financial structure.
The exchange and termination agreements, as well as the issuance of the 2029 notes, have not been registered under the Securities Act or any other securities laws and are therefore subject to certain restrictions.
The company's decision to restructure its debt through these transactions is based on information contained in a press release statement.
In other recent news, BigBear.ai has seen a flurry of activity. H.C. Wainwright analyst Scott Buck raised the stock target for the company to $7, reflecting growing demand for BigBear.ai's artificial intelligence-enabled services.
The company also exchanged approximately $182.3 million in convertible senior notes, swapping existing notes due in 2026 for new 6.00% convertible senior secured notes maturing in 2029.
BigBear.ai has also been actively involved in several defense and aviation initiatives. The company secured a significant $165.2 million production contract with the U.S. Army and implemented its veriScan™ biometric verification system at Denver International Airport. In addition, BigBear.ai was awarded a substantial role in a Federal Aviation Administration $2.4 billion IT contract and entered into a master service agreement with Heathrow Airport, Europe's largest airport.
Furthermore, BigBear.ai has announced a collaboration with Proof Labs Inc to enhance the cybersecurity of U.S. Air Force and U.S. Space Force assets. The company also participated in the U.S. Navy's Mission Autonomy Proving Ground exercises, showcasing its ConductorOS platform for enhanced maritime domain awareness.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.