VNET Repurchases $75.3 Million of 2027 Notes
Key Facts
VNET Group said on October 27, 2026, that it repurchased convertible senior notes with a principal amount of about $75.3 million, reducing the outstanding portion of an issue due in 2027. The repurchased amount represents about 30% of the notes’ total principal of $250 million. The notes carry an annual interest rate of 2.00%, according to a company statement published via PR Newswire. The transaction was conducted through privately negotiated deals with noteholders. Total cash consideration was about $80 million, including accrued interest, exceeding the principal amount of the notes repurchased.
The difference between the principal amount and the cash consideration reflects the inclusion of accrued interest in the deal amount, according to the company statement. Cash paid was therefore about $80 million, while the principal amount of the notes covered was about $75.3 million. The statement did not say the transaction was intended to reduce the company’s total debt, and the value of the repurchased notes alone is not enough to establish the change in its total liabilities. The company confirmed that it reduced part of a convertible issue with total outstanding principal of $250 million. The 2.00% interest rate remains among the notes’ disclosed terms.
The original notes date to February 4, 2022, when VNET issued them to investors in funds managed by Blackstone Tactical Opportunities, according to a company filing with the U.S. Securities and Exchange Commission. The securities were classified as senior unsecured obligations. In an amendment announced in February 2026, the company extended the maturity date from March 4, 2027, to October 1, 2027. The amendment kept the annual interest rate at 2.00%. It provided for semiannual payments on April 1 and October 1, following satisfaction of a condition that the notes be transferred to a third party unaffiliated with the investor.
The February 2026 amendment also covered conversion into American depositary shares at an initial price of $11 per depositary share. Each depositary share represents six Class A ordinary shares, according to the company filing. The issue therefore combines interest payments with the option to convert into shares at the price set in the amendment. The announced repurchase covers part of the outstanding issue’s principal amount and does not, by itself, change the disclosed terms for the remaining portion. The amended maturity date set out in the filing remains October 1, 2027.
The note transaction comes as the company expands its data center business. In the second quarter of 2026, total revenue rose 14.2% year over year to 2.78 billion yuan, from 2.43 billion yuan in the same period of 2025. Wholesale data center revenue increased 29.3% to 1.10 billion yuan, from 854.1 million yuan a year earlier. Wholesale operational capacity reached 1,007 megawatts as of June 30, 2026, up 49.4% from 674 megawatts on the same date a year earlier. These figures show revenue and operational growth during the same period in which the company announced its annual financial terms.
Company founder and Chief Executive Officer Josh Sheng Chen said VNET won a 345-megawatt wholesale order from a cloud services provider in the second quarter. He added that wholesale orders won since the start of the year reached 862 megawatts by the end of the second quarter. The company maintained its 2026 total revenue forecast at between 11.5 billion and 11.8 billion yuan. It also forecast capital expenditures of between 10 billion and 12 billion yuan for the same fiscal year. These figures outline the revenue and capital spending ranges the company announced alongside its second-quarter results.
The February 2026 amendment gives noteholders the right to require VNET to repurchase all or some of the amended notes for cash on February 4, 2027, following satisfaction of a condition that they be transferred to a third party unaffiliated with the investor. The filing sets this right ahead of the amended maturity date of October 1, 2027. The stock closed at $3.93 on October 26, 2026, according to EL7 data. Available data do not include the session’s low or high prices. The scheduled repurchase right in February 2027 is the next date specified in the notes’ terms.