MicroStrategy Plans $700M Debt Issuance To Boost Bitcoin Portfolio
MicroStrategy, a leading technology company in the cryptocurrency field, is planning to have another round of debt offering series in 2024. $700 million is the amount targeted for the offering with the responsible issue of new convertible senior notes due in 2028.
The companys move is the latest in a series of steps to revamp its financial structure and increase its Bitcoin holdings. The allowed placement will be contingent upon positive market conditions and will be a private placement of securities to qualified institutional buyers (Rule 144A of the Securities Act).
The new convertible senior notes, expected to mature on September 15, 2028, are unsecured and will pay interest twice a year, starting from March 15, 2025. MicroStrategy will be able to buy back the notes beginning on December 20, 2027, and then it has to have at least $75 million in outstanding notes for a partial redemption.
Noteworthy is the fact that these notes can be converted into cash, shares of MicroStrategys class A common stock, or a mix of both, based on the companys discretion. The specific conversion rates and interest terms are going to be settled with the pricing of the offering, where the initial rates will be based on the average trading price of MicroStrategys stock during a certain period.
The proceeds from this debt issuance are mainly reserved for the redemption of $500 million worth of current 6.125% Senior Secured Notes due in 2028, the rest being available for either new Bitcoin purchases or general corporate uses.
MicroStrategys Redemption Plan and Use of Proceeds
During this process, MicroStrategy has issued a redemption notice for the Senior Secured Notes, which will be redeemed on September 26, 2024, at 103.063% of the principal amount and additional interest. The redemption will free up collateral securing these notes, which includes around 69,080 Bitcoin.
The new convertible notes that are offered will be restricted to the qualified institutional buyers, who are not allowed to register under the Securities Act or other securities laws. Therefore, it will be conducted through a private offering memorandum.
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Read more: https://www.tronweekly.com/microstrategy-plans-700m-notes-sale/
Text source: TronWeekly
