COLUMBIA, Md. - BigBear.ai Holdings, Inc. (NYSE: BBAI), a provider of AI-driven decision intelligence solutions with a market capitalization of $784 million and annual revenue of $155 million, has announced an exchange of approximately $182.3 million in convertible senior notes. According to InvestingPro data, the company maintains a healthy liquidity position with a current ratio of 2.06, indicating its ability to meet short-term obligations. The exchange involves privately negotiated agreements with select note holders, swapping existing notes due in 2026 for new 6.00% convertible senior secured notes maturing in 2029, along with a nominal cash payment for accrued interest.
The transaction, expected to close around December 27, 2024, will leave approximately $17.7 million of the old convertible notes outstanding. InvestingPro analysis reveals that BigBear.ai's stock has shown significant momentum, with a remarkable 143% return over the past six months. InvestingPro subscribers have access to 12 additional key insights about BBAI's financial health and market performance. The new notes will be guaranteed by BigBear.ai and certain subsidiaries, with a security interest in most of the company's assets. Interest on the new notes can be paid in cash or, under certain conditions, in BigBear.ai common stock.
BigBear.ai will not gain any cash proceeds from this exchange. The new notes will have an interest rate of 6.00% per annum when paid in cash and 7.00% when paid in stock, with interest payable semi-annually from June 15, 2025. The initial conversion rate and price of the new notes will be set based on BigBear.ai's stock price at the time of the exchange agreement, with adjustments for specific events.
Noteholders have the option to convert their notes into common stock before maturity, subject to New York Stock Exchange rules requiring stockholder approval for such conversions. If a "fundamental change" occurs, noteholders can demand repurchase of their notes at the principal amount plus accrued interest.
The indenture governing the new notes includes restrictions on BigBear.ai's activities, such as incurring additional debt and making certain types of investments. Additionally, the company plans to terminate its existing senior secured revolving credit facility, which had no outstanding borrowings, in conjunction with the exchange. With the stock currently trading above its InvestingPro Fair Value and showing high price volatility, investors can access comprehensive analysis and detailed financial metrics through InvestingPro's exclusive research reports, available for over 1,400 US stocks including BBAI.
The new notes and any common stock issued upon their conversion will not be registered under the Securities Act and will be subject to resale restrictions. This press release is based on a press release statement and does not constitute an offer to sell or a solicitation of an offer to buy any securities.
In other recent news, BigBear.ai, a company specializing in AI-powered decision intelligence, has been making significant strides in the defense and aviation sectors. The company has recently been awarded a five-year contract valued at $165.15 million by the U.S. Army to provide Global Force Information Management (GFIM) Production Services, aiming to consolidate 15 legacy systems into a modernized, data-centric platform. This contract is expected to bolster BigBear.ai's revenue, which was approximately $155 million in the last twelve months.
In addition, BigBear.ai has been selected to enhance the cybersecurity of U.S. Air Force and U.S. Space Force assets through a collaboration with Proof Labs Inc. The project will utilize BigBear.ai's SpaceCREST technology, aiming to detect and classify normal versus compromised behavior in satellite systems using AI-driven analytics.
On the aviation front, BigBear.ai has implemented its veriScan™ biometric verification system at Denver International Airport and secured a significant role in a Federal Aviation Administration $2.4 billion IT contract. The company has also entered into a master service agreement with Heathrow Airport, Europe's largest airport.
In the realm of corporate developments, BigBear.ai has appointed Carl Napoletano as its new Chief Operating Officer. This move was positively received by H.C. Wainwright analysts, who reiterated a Buy rating on the company's shares. These are recent developments that underscore BigBear.ai's growing role in the application of artificial intelligence in the fields of defense and aviation.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.