Rocket Lab funds Iridium cash consideration with $1.94 billion share sale, cancels $3.6 billion bridge

Rocket Lab said before the open that it had completed its at-the-market share sale, raising approximately $1.944 billion in gross proceeds through 29.3 million new shares, before commissions and offering expenses. Net proceeds are earmarked for the cash payments on the pending Iridium purchase. In the same breath it said Iridium had amended its existing term loan so the deal will not count as a change of control, and that Rocket Lab had terminated the $3.6 billion senior secured bridge it arranged when the takeover was struck in June. The company said the offering plus available liquidity now covers the cash consideration.

That funded the cash consideration by selling stock after a 42% three-month slide.

Those shares already sit under the merger collar’s $67.50 floor. Unless Rocket Lab recovers before close, Iridium holders receive the maximum 0.4000 exchange ratio on the stock leg. The new shares are already out: the August ATM program was not conditioned on the acquisition closing, so if Iridium’s vote fails or a regulator blocks the transfer, the stock remains issued. Iridium shareholders still vote on September 24, the FCC has not approved the license transfer, and both companies still describe closing as a mid-2027 event.

By 9:50 a.m. Eastern, Rocket Lab was up 1.6% at $63.55. Iridium was little changed at $46.19. The cash-and-stock terms and the expected close were not amended.

29.3 million new shares, on a weaker stock

The implied gross average on the ATM, from Rocket Lab’s own rounded figures, is about $66.35 a share, 6.1% above Monday’s $62.55 close. The stock is also down 20% over one month and sits 58% below its 52-week high of $151.

Rocket Lab did not publish a Tuesday share count. The last full figure in its merger registration statement is 598.2 million common shares outstanding as of June 30. Against that baseline, 29.3 million new shares are about 4.9% of the pre-sale book, or about 4.7% of a 627.5 million-share pro forma count. Employee equity and any other issuance since June 30 are not in that arithmetic, so it is a June 30 dilution sketch, not a live cap table.

It is also not the last slug of paper. Under the June 28 merger agreement, each Iridium share still converts into $27.00 in cash plus Rocket Lab stock set by a collar: an exchange ratio of 0.4000 if the 10-day volume-weighted average price is $67.50 or lower, a sliding ratio between $67.50 and $112.50, and 0.2400 if the stock is at or above $112.50. On Iridium’s 106.0 million shares outstanding as of June 30, the floor ratio implies about 42.4 million additional Rocket Lab shares at close.

The loan Rocket Lab chose to keep

The original June financing plan leaned on that $3.6 billion, 364-day bridge, alongside cash on the balance sheet. Tuesday’s structure keeps Iridium’s term loan in place instead: $1.775 billion outstanding as of June 30, amended so the acquisition is carved out of the change-of-control definition, with Rocket Lab USA to provide an unsecured guarantee at closing. Rocket Lab called the amended facility cost-effective permanent financing supported by Iridium’s free cash flow. A Tuesday 8-K sets the post-closing pricing: SOFR plus 2.50% to 3.00%, or a base rate plus 1.50% to 2.00%, depending on Rocket Lab’s credit ratings, plus a 1.00% exit fee on certain prepayments after the first anniversary and a 1.00% prepayment premium. The filings do not disclose the terminated bridge’s pricing, so a dollar amount saved versus drawing it is not on the page.

Iridium reported $119.1 million of operational EBITDA, its adjusted operating-profit measure, in the second quarter, against $1.59 billion of net debt and net leverage of 3.3 times trailing-twelve-month operational EBITDA. That is the satellite operator Rocket Lab is buying, and the debt it is leaving in place.

$27.00 a share on Iridium’s June 30 count is $2.86 billion of cash consideration. The $1.944 billion gross ATM covers about 68% of that stub; Rocket Lab said the rest comes from unrestricted cash and available liquidity. The $8 billion enterprise-value headline from June 29 is a different quantity: it includes debt that is now being left outstanding rather than refinanced.

Iridium lenders are on the other side of that choice. They keep a loan that was supposed to be taken out, and they pick up a Rocket Lab guarantee if the deal closes. Iridium holders still have to vote for the $27-plus-stock package, with the stock leg worth less than $27 whenever Rocket Lab sits below the $67.50 floor.

September 24, the FCC, and a 2027 close

Several gates have already opened. The Hart-Scott-Rodino waiting period expired on August 12. Rocket Lab’s Form S-4 was declared effective on August 26, and Iridium mailed the definitive proxy. What remains is the list that can still stop a close.

Iridium has set a virtual special meeting for Thursday, September 24, seeking approval from holders of a majority of the outstanding common stock. The board has recommended a vote for the merger. FCC consent to transfer Iridium’s space-station, earth-station and related authorizations, filed on August 10, is still an express closing condition, as are specified foreign-investment and satellite approvals, Nasdaq’s OK of the Rocket Lab shares issued in the merger, and the usual no-material-adverse-effect tests.

Both companies still point to mid-2027. The merger agreement lets either side walk if the deal is not done by June 28, 2027, with possible extensions to September 28 and December 28, 2027. Tuesday’s release did not move those dates. Iridium at $46.19 remains about $8 below the $54.00-a-share notional value struck on June 29.

Space funds already sit on both sides

Rocket Lab is widely held, but the concentrated bets are in space portfolios. Among US-listed funds, the largest disclosed weight is in Tema Space Innovators ETF CNASA, at 9.62%. Procure Space ETF CUFO already owns both sides: 3.52% Rocket Lab and 3.69% Iridium. iShares U.S. Aerospace & Defense ETF AITA is the big-dollar line: 2.49%, about $321 million, inside a $12.9 billion aerospace tracker.

Latest disclosed holdings, most as of September 13–15. A space-and-ocean tracker, State Street’s SPDR S&P Kensho Final Frontiers ETF AROKT, is not on that Rocket Lab board: its line here is Iridium, at 3.51%.

If the merger closes, Iridium’s listing ends and holders receive cash and Rocket Lab stock. Funds such as CUFO would then hold the merger consideration until their indexes or managers rebalance. For CNASA, at 9.62%, the dilution and the satellite operator that may follow are the position.

Rocket Lab still has to climb back through $67.50 before the 10-day average is taken, or Iridium holders collect the maximum 0.4000 ratio.