FRMI Prices Upsized $375M Convertible: Key Considerations

Research evidence excerpt

FRMI Prices Upsized $375M Convertible: Key Considerations

Flash Note Energy | Power & Utilities

July 11, 2026

Fermi Inc. Nicholas Amicucci, CFA Sharon Wang 212-812-2931 212-653-8999

FRMI | $7.32 nicholas.amicucci@evercoreisi.com Sharon.Wang@evercoreisi.com

In Line | Target Price/Base Case: $11.00

Company Update

Fermi priced an upsized offering of $375M of 5.00% convertible senior notes due 2031, up from the amount initially marketed, with

a $56.25M initial-purchaser option that would take gross proceeds to $431.25M if exercised in full. The notes were sold to qualified

institutional buyers under Rule 144A and are expected to close July 14, 2026. Net proceeds are estimated at roughly $362.25M

($416.81M with the option), with about $30.0M earmarked to fund capped call transactions and the balance for general corporate

purposes. The company is building Project Matador, a large-scale private-power and AI data-center campus in the Texas

Panhandle, so we read the raise as balance-sheet fuel for a capital-intensive development runway. While the convertible raise

was the headline event, there were a couple of incremental data points we believe are worth investor consideration,

namely the explicit timing of a tenant catalyst (outlined as 3Q26), the quantification of the company’s speed to power

timeline, and the company’s parallel pursuit of DOE Energy Dominance financing. Within the presentation associated with

the release Fermi indicated its expectation to sign its first binding JV and/or tenant agreement in 3Q26, also noting it is

actively engaged with 7 prospective tenants and 12 potential strategic partners alongside advisor Broadhaven, with talks

advanced to "substantive negotiations" and management "increasingly confident." Management also indicated any