MicroStrategy is planning to raise $700 million through the private sale of convertible senior notes which will be due in 2028 to qualified institutional buyers. The company plans to use the proceeds to redeem $500M worth of 6.125% senior secured notes and purchase more Bitcoin (BTC).
The Bitcoin bull firm may also grant an option for an additional $105 million in notes within a 13-day window after issuance. However, this offering is subject to market and other conditions. The notes can be redeemed for cash on or after December 20, 2027, under specific conditions.
MicroStrategy outlines $700M offer
As per MicroStrategy, the notes will be unsecured, senior obligations of MSTR and will bear interest payable semi-annually in arrears on March 15 and September 15 of each year. This will kick off from March 15, 2025. The notes will mature in September 2028, unless converted, repurchased, or redeemed earlier under their terms.
MicroStrategy may redeem the notes for cash starting December 20, 2027. If less than all notes are redeemed, a minimum of $75 million in aggregate principal must remain outstanding. Holders of the notes will have the right to require MicroStrategy to repurchase their notes for cash on September 15, 2027. These notes are convertible into cash, Class A stock, or a mix.
It plans to redeem the full $500 million aggregate principal amount of its existing 6.125% Senior Secured Notes due 2028. The redemption is set for September 26, 2024, and is expected to be done at 103.063% of the principal amount after adding accrued and unpaid interest which turns out to be around $523.8 million.
MicroStrategy Announces Proposed Private Offering of $700M of Convertible Senior Notes $MSTR https://t.co/OCq7wj2u0P
— Michael Saylor⚡️ (@saylor) September 16, 2024
The proceeds from the new offering will first cover the redemption of these Senior Secured Notes. It mentioned that the remaining funds will be used to acquire additional Bitcoin or other strategies to bolster its BTC holdings.
MSTR buys 18,300 more Bitcoin
MicroStrategy recently announced its largest Bitcoin acquisition since February 2021 where it grabbed around $1.1 billion worth of BTC. The firm bought 18,300 BTC between August 6 and September 12, 2024. The company paid an average of $60,408 per Bitcoin. This latest haul pushes their total Bitcoin holdings to 244,800 BTC (approx worth $14.14 billion).
The biggest crypto price has seen a drop of 11% over the last 90 days, providing a good opportunity for investors to buy the dip. Bitcoin recorded a recovery of 3% in the last 7 days. BTC is trading at an average price of $58,263, at the press time.
