MicroStrategy disclosed the pricing of its convertible senior notes offering to $700 million and revealed proceeds from the sale will be used to buy additional BTC.
The notes will be sold in a private offering to qualified institutional purchasers under Rule 144A of the Securities Act of 1933, as stated in an official press release. The aggregate principal amount of the offering has been increased from the $500 million that was previously announced.
The organization will allocate some of its earnings to expanding its corporate treasury by acquiring additional Bitcoin. MicroStrategy has acquired 214,400 BTC, estimated at $14 billion, as of the most recent data submitted in its Q1 2024 financial results.
Terms and conditions of private offering
The notes, which are unsecured senior obligations of MicroStrategy, will accrue interest at a rate of 2.25% per annum. Interest will be payable semi-annually in arrears on June 15 and December 15 of each year.
“Unless previously repurchased, redeemed, or converted,” the notes will mature on June 15, 2032, as stipulated in their provisions.
“Subject to certain conditions, on or after June 20, 2029, MicroStrategy may redeem for cash all or any portion of the notes at a redemption price equal to 100% of the principal amount of the notes to be redeemed.”
Proceeds Will be used to buy More Bitcoin
After subtracting the estimated offering expenses, commissions, and discounts paid by the initial purchasers, MicroStrategy anticipates that the sale would generate approximately $687.8 million in net proceeds.
The total proceeds could reach approximately $786 million if the initial purchasers exercise their option to purchase additional notes in full.
“MicroStrategy intends to use the net proceeds from the sale of the notes to acquire additional Bitcoin and for general corporate purposes.”
Bitcoin banking
MicroStrategy’s decision on June 14 follows its previous declaration that it intends to raise $500 million through a comparable offering on June 13.
The Bitcoin-maxi firm’s ongoing expansion to $700 million is consistent with its not-so-micro strategy to enhance its BTC holdings and position in the crypto market.
It is crucial to acknowledge that the notes will not be officially registered with the United States Securities and Exchange Commission (SEC) since they are being sold under Rule 144A of the Securities Act 1933.
SEC legal prerequisites must be satisfied to sell or purchase notes transacted under Rule 144A in public markets.
