MicroStrategy Completes $1B Offering of Convertible Notes for Bitcoin and Debt Repayment
Hongji is a crypto and tech reporter. He graduated from Northwestern University's Medill School of Journalism with a Bachelor's and a Master's. He has previously interned at HTX (Huobi Global),...
MicroStrategy announced on Friday it had completed a $1.01 billion offering of convertible senior notes.
The company plans to use the proceeds to repay debt and purchase more Bitcoin, solidifying its strategy of using cryptocurrency as a primary reserve asset.
The funds will be allocated to redeem MicroStrategy’s existing senior secured notes and to buy additional Bitcoin, reinforcing its approach of holding crypto as a core element of its treasury reserves.
The company confirmed that the convertible notes will mature in September 2028 and carry an interest rate of 0.625% per year, payable semi-annually.
MicroStrategy Completes $1.01 Billion Upsized Offering of Convertible Notes at 0.625% Coupon and 40% Conversion Premium. $MSTR https://t.co/mJK5xwyn4S
These notes can be converted into cash, MicroStrategy’s class A common stock, or a combination of both, depending on the company’s preference.
The initial conversion price is set at approximately $183.19 per share, reflecting a 40% premium over the stock’s average price as of September 17, 2024.
MicroStrategy intends to use the proceeds to redeem $500 million of its 6.125% Senior Secured Notes on September 26, following the offering’s completion.
The remaining funds will go towards purchasing additional Bitcoin and meeting other corporate needs.
The company also introduced an option for early redemption starting in December 2027, allowing it to repurchase the notes under specific conditions.
MicroStrategy requires at least $75 million of the notes to remain outstanding if it decides to
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