MARA Holdings raises $980M net from a $1B convertible note sale to expand Bitcoin reserves and manage debt.
Convertible notes set for 2030 maturity; MARA can redeem for cash if the stock exceeds 130% of the conversion price.
After recent acquisitions, MARA now holds 25,945 BTC, valued at $2.52B, as Bitcoin hits a new high of $98,000.
MARA Holdings, one of the major players in the Bitcoin mining segment, revealed it has successfully closed a $1 billion offering of 0% Convertible Senior Notes. Completed on Thursday it intend's to strengthen the company’s capacity to secure Bitcoin through acquisitions, buy back debts, and fund core operations.
This offering, combined with the initial purchasers’ exercise of a $150 million option, has generated approximately $980 million of net proceeds. MARA intends to use part of this cash to redeem outstanding convertible notes that are due in 2026. This action will provide the company with increased financial flexibility while enabling further Bitcoin acquisitions and operational investments.
https://twitter.com/MARAHoldings/status/1859583965448855728 Proceeds from the Offering and Their Strategic Allocation
Out of the $980 million net proceeds, $212 million is earmarked for repurchasing convertible notes due in 2026. These repurchases will be completed through privately negotiated transactions, helping the company manage its existing debt more effectively. The remaining proceeds will support the company’s strategic initiatives, primarily its Bitcoin acquisitions.
MARA’s approach to this offering reflects its ongoing commitment to expanding its Bitcoin reserves. The company will continue to add more stakes in line with the increased uptake of public firms in Bitcoin. Although Bitcoin is a volatile currency, MARA purchased 25,945 BTC, equating to $2.52 billion, when Bitcoin set a record price.
Key Features of the Convertible Senior Notes
The convertible notes offered by MARA are set to mature in 2030 and carry no regular interest payments. Instead, they feature special interest provisions under specific conditions outlined in the indenture agreement. The notes also allow the company to repurchase them for cash, beginning in 2028, if the company’s stock price surpasses 130% of the conversion price for a specified period.
Investors in these notes can convert them into cash, shares of MARA common stock, or a combination of both. The conversion price of approximately $25.91 per share represents a premium of 42.5% over the current stock price, offering an incentive for holders to engage in the conversion process.
This structure allows MARA to raise substantial funds without taking on traditional debt obligations. However, the notes and the shares tied to the offering are not registered under U.S. securities laws, which limits their traceability to appropriate exemptions.
Growing Bitcoin Acquisition Strategy Among Public Companies
The development came after several other public-sector companies started holding bitcoins. Notably, MicroStrategy, one of the largest Bitcoin holders in the world among publicly traded companies, has seen its stock rise about 120% of its Bitcoin acquisitions. MicroStrategy declared a $1.75 billion convertible note offering this week to acquire more bitcoins.
MARA has faced issues; the company reported a $125 million net loss in Q3 due to rising operational costs. Nonetheless, it continues to invest in bitcoin and expand its mining capabilities, showing its commitment to the crypto market. With a surge in its hash rate by 93%, MARA has demonstrated significant improvements in its mining efficiency.
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