IREN's recent 3 billion yuan convertible bond deal is quite clever, offering 1% coupon for a 32.5% premium, with a cap to hedge against dilution, becoming the textbook for financing in the AI computing power arms race.

IREN Limited announced the completion of a total $3.0 billion convertible preferred notes offering due in 2033, with a coupon rate of 1%, a conversion premium of 32.5%, and a capped call option hedge; if the share price is above $110.3, additional dilution may still occur. Net proceeds were approximately $2.96 billion, with $201 million used for hedging, and the remainder for general purposes and working capital. The market generally interprets this as funding an expansion of AI data centers and GPU computing capacity. This move shows that AI infrastructure companies lock in capital through large-scale debt and convertible bonds to meet computing power demand and construction timelines.