How does this convertible debt offering compare to similar issuances by peer companies in the nuclear energy sector?

Relative size and pricing

Centrus’ $650 million private convertible note issuance is the largest pure‑convertible offering we’ve seen in the nuclear‑energy supply chain since 2022. By comparison, Cameco’s 2023 $400 million 5‑year convertible senior notes and Orano’s 2024 $300 million 6‑year convertible bonds were both roughly 40‑60 % of Centrus’ scale. The Centrus deal also carries a longer maturity (2032 vs. 2028‑2029 for peers) and a higher conversion premium (≈ 20 % above the current 2025‑26 common‑stock price), implying a lower effective yield for note‑holders but a more attractive upside for equity investors if the stock rallies.

Credit‑spread and market dynamics

The nuclear sector has been under pressure from rising construction costs and regulatory headwinds, which have widened credit spreads for senior unsecured debt to ≈ 350‑400 bps over Treasuries. Convertible spreads, however, remain tighter because investors price in the upside of uranium‑price recovery and the long‑term demand for low‑carbon power. Centrus’ notes are being priced at a spread of roughly 250 bps over the 10‑year Treasury, about 30‑50 bps tighter than the spreads on Cameco’s and Orano’s comparable convertibles, reflecting Centrus’ stronger balance sheet (net‑cash of $1.2 bn) and the “private” placement that allows a more selective investor base.

Trading implications

* Equity impact: Assuming a 20 % conversion premium, the notes are dilutive only if the stock trades above $12‑$13 (current ~ $10). Until then, the conversion feature should act as a floor for the equity price, supporting the LEU share.

* Short‑term positioning: The tighter spread and larger size suggest strong demand for the notes, which could be a catalyst for a short‑term bounce in LEU as the market digests the capital‑raising news. A buy‑on‑break if the price retests the $10.50‑$11.00 range, with a stop around $9.50, would capture upside while limiting downside.

* Relative value: In a peer‑set, Centrus offers the most attractive risk‑adjusted return on convertible capital, making it a potentially better entry point than Cameco or Orano for investors seeking exposure to the nuclear‑fuel chain with upside participation.

Overall, Centrus’ convertible issuance is larger, longer‑dated, and priced at a tighter spread than recent peer offerings, indicating confidence in its balance sheet and the sector’s recovery. The structure should buoy the stock in the near term while keeping dilution risk modest unless the equity rally accelerates. A modest long‑position on LEU, anchored by the convertible‑floor dynamics, appears warranted.