MicroStrategy, a prominent business intelligence and Bitcoin development firm, has revealed a proposed private offering of $700 million in convertible senior notes set to mature in 2028. This offering will target institutional investors under Rule 144A of the Securities Act, with an additional option for buyers to purchase up to $105 million more in notes.
JUST IN: MicroStrategy to raise $700 million "to acquire additional #bitcoin" and redeem Senior Secured Notes. pic.twitter.com/2VV9PMkEd6
— Bitcoin Magazine (@BitcoinMagazine) September 16, 2024
The notes will comprise senior, unsecured obligations of MicroStrategy, with interest paid semi-annually and maturing in September 2028. Holders will have the option to convert their notes into cash, shares of MicroStrategy’s class A common stock, or a mix of both, based on the company’s discretion. Specific conversion terms will be established at the pricing phase.
MicroStrategy plans to use the proceeds to redeem all $500 million of its current 6.125% Senior Secured Notes that are due in 2028. The surplus funds will be directed towards acquiring more Bitcoin.
“On September 16, 2024, MicroStrategy issued a redemption notice indicating that the Senior Secured Notes will be redeemed on September 26, 2024 (the “Redemption Date”) at a redemption price of 103.063% of the principal amount, plus any accrued and unpaid interest, up to but excluding the Redemption Date (approximately $523.8 million in total), contingent upon the successful closing and settlement of the note sale,” stated MicroStrategy. “Upon redemption of the Senior Secured Notes, all collateral securing them, including roughly 69,080 bitcoins, will be released.”
The offering is dependent on market conditions, with no assurance regarding the timing or terms of its completion. The notes will remain unavailable for public sale, thus preserving their private status according to the Securities Act.
