MicroStrategy (MSTR) announced plans to privately issue $500 million in convertible senior notes to increase its holdings in Bitcoin and support corporate initiatives.

Issuance of $500 million convertible senior notes

MicroStrategy announced it will issue $500 million of convertible senior notes due in 2032 in a private transaction.

To further entice initial buyers, MicroStrategy plans to offer the option to purchase up to an additional $75 million in bonds within 13 days of the initial issuance date. This flexibility ensures that the company can adapt to market demands and conditions.

Convertible bond details

Interest is payable on these unsecured senior notes on June 15 and December 15 of each year, beginning on December 15, 2024. The bonds will mature on June 15, 2032, unless earlier repurchased, redeemed or converted in accordance with the terms.

Beginning June 20, 2029, MicroStrategy has the option to redeem all or a portion of the Notes for cash, subject to at least $75 million remaining after redemption. Holders also have the right to request a buyback on June 15, 2029. Conversion options include cash, shares of MicroStrategy Class A common stock, or a combination specified by the company. Conversions can be made under certain conditions until December 15, 2031, and at any time up to two days before expiration.

Purpose of issuance: Of course, to buy Bitcoin

Proceeds from the offering will be used primarily to purchase more Bitcoin and for general corporate purposes, consistent with MicroStrategy’s strategic focus of expanding its cryptocurrency holdings.

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