Bitcoin mining firm Marathon Digital (NASDAQ: MARA) has revealed plans to issue convertible notes to generate $250m in revenue.
The notes will mature in 2031 and be offered solely to qualified institutional investors against a 2.125% annual interest rate. According to the company announcement, strong institutional interest came shortly after Marathon Digital resolved to make the offer.
Being senior unsecured obligations of the firm, these convertible notes have an initial conversion rate of 52.9451 MARA shares per $1,000 principal amount; it represents a conversion price of around $18.89 per share. Under such an arrangement noteholders can cash out their notes or convert them into common stock at any time Marathon Digital chooses.
Nevertheless, this conversion option will exist only under certain conditions before March 1, 2031, and thereafter until two days before the maturity date.
Use of Proceeds: Bitcoin Purchases and Strategic Investments
Marathon Digital intends to purchase more Bitcoin with the net proceeds from the offering. In addition, it will also direct some of these funds for general corporate purposes including working capital, expansion of its existing assets, debt repayment and potential strategic acquisitions.
Furthermore, Marathon’s decision is in line with its broader policy of reinforcing its position in the Bitcoin mining industry during ongoing market fluctuations and the increasing Bitcoin halving event.
The move implies that Marathon Digital believes in cryptocurrency’s future, hence this move. Among other things, it wants to be noticed as a major publicly traded miner of Bitcoin by enlarging its mining operation and making a mark within the sector.
“Made in USA” Bitcoin Blocks Initiative
In a related development, Marathon Digital also said that it would mark all Bitcoin blocks mined in the United States with “Made in USA.” This is possible because Marathon operates MARA Pool, its mining pool, which ensures that only U.S.-made blocks are mined.
Fred Thiel, CEO of Marathon Digital, said:
“Every block mined by MARA Pool in the USA is proudly stamped ‘Made in USA’. We are the only large-scale miner who can do this because we run our own pool and ensure that all the blocks mined by MARA Pool are made in the USA.”
This aligns with former president Donald Trump’s call for increased domestic Bitcoin mining as part of an overarching initiative to support America’s energy supremacy.
Despite healthy demand for its convertible notes on offer, Marathon Digital shares came under selling pressure on Monday, hitting a decline of 11%
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