Coinbase Global Inc., a Nasdaq-listed crypto trading firm, has disclosed its intention to issue Convertible Senior Notes with a face value of $1 billion.
American cryptocurrency exchange, Coinbase Global Inc. intends to investigate convertible senior notes as a potential new capital-raising method.
The Coinbase Convertible Senior Notes
Coinbase alluded to its intention of issuing convertible senior notes with maturities of up to $1 billion in 2030.
Additionally, Coinbase intends to offer the notes to institutional investors via a private offering.
The exchange aims to offer a 30-day option upon its inception, enabling purchasers to cover over-allotments by purchasing an additional $150 million worth of securities.
Moreover, the company reserves the right to convert the notes into cash, shares of Coinbase’s Class A common stock, or a combination of the two.
In the long run, Coinbase intends to use the proceeds to repay its outstanding 0.50% convertible senior notes, 3.375% senior notes, and 3.625% senior notes at maturity or repurchase or redeem them before maturity.
Meanwhile, the outstanding 0.50% convertible senior notes do not mature until 2026, while the 3.375% and 3.625% due dates do not occur until 2028 and 2031.
A portion of the net proceeds may be allocated towards routine corporate expenditures, such as working capital and expenses associated with the capped-call transactions.
Coinbase aspires to execute a capped-call transaction utilizing at least one of its customers.
However, the capped-call transactions will suffice for the Coinbase common stocks that backed the notes from the start.
Like Coinbase Like MicroStrategy
Recent Bitcoin purchases by business intelligence software provider MicroStrategy bring the company’s total holdings to around 203,000 BTC.
With an average purchase price of $68,477 per Bitcoin, the acquisition cost a total of approximately $821.7 million.
In addition to maintaining its Bitcoin strategy, an additional noteworthy development is that the acquisition was financed through surplus cash and proceeds from convertible notes.
Meanwhile, a few days before the most recent acquisition, MicroStrategy increased the price of its notes sale to $700 million.
Among the notes were senior convertible notes with a maturity of 2030.
Furthermore, initial purchasers were permitted to acquire an additional $100 million worth of notes from MicroStrategy within thirteen days after the notes’ issuance.
As MicroStrategy and Coinbase investigate this debt offering option, it is rapidly emerging as a noteworthy trend.
