According to TechFlow, on September 17, MicroStrategy (NASDAQ: MSTR) announced plans to issue $700 million in convertible senior notes due in 2028. The private placement is for qualified institutional investors and is conducted in accordance with Rule 144A of the Securities Act of 1933. The company also granted the initial purchaser an option to purchase up to an additional $105 million in notes within 13 days of the first issuance date of the notes.
The notes issued are unsecured senior debt, with interest payable semi-annually on March 15 and September 15, with the first interest payment due on March 15, 2025. The notes will mature on September 15, 2028, unless repurchased, redeemed or converted earlier in accordance with the terms. Beginning December 20, 2027, MicroStrategy may elect to redeem all or part of the notes for cash, subject to certain conditions.
MicroStrategy plans to use the proceeds for the following purposes:
Redemption of $500 million of 6.125% senior secured notes: The redemption price is 103.063% of the principal amount, plus accrued and unpaid interest, totaling approximately $523.8 million, and the redemption date is September 26, 2024.
Increase Bitcoin reserves and meet general corporate purposes.
It is worth noting that once the redemption of the existing senior secured notes is completed, the collateral of approximately 69,080 bitcoins will be released, which will increase the company's asset liquidity. As of the second quarter of 2024 financial report, the total amount of bitcoins held by MicroStrategy has exceeded 150,000, with an average purchase price of approximately US$30,000.
