Business Intelligence Company MicroStrategy (NASDAQ:MSTR) announced the pricing of its $875 million convertible senior notes offering due 2028.
what happened: The offering, which is expected to close by Sept. 19, 2024, is part of the company's strategy to repay $500 million of its outstanding senior secured notes and use the remaining funds to purchase additional bitcoin.
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According to a press release, net proceeds from the offering are estimated to be $864.1 million, which could increase to $997.4 million if the initial buyers exercise their options to purchase additional amounts.
The notes, which bear interest at 0.625%, are convertible into cash, MicroStrategy's Class A common stock, or a combination of both, providing flexibility to noteholders.
MicroStrategy, under the leadership of its Executive Chairman, Michael Saylorbegan acquiring Bitcoin in 2020 and positioned it as a reserve asset within the company's treasury.
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Since then, the company has grown to become the largest corporate holder of Bitcoin, holding 244,800 BTC, worth roughly $14.2 billion at current prices.
The company recently announced a new Bitcoin purchase worth $1.1 billion, but still has $900 million available from a previous funding round.
The redemption of $500 million of senior secured notes, scheduled for Sept. 26, is contingent on the successful completion of the new convertible notes offering.
The redemption frees up approximately 69,080 BTC that was being used as collateral, providing further flexibility to the company's balance sheet.
What's next?These trends will be discussed at Benzinga's Future of Digital Assets event on Nov. 19, which will focus primarily on bitcoin's role in institutional portfolios and the broader adoption of digital assets.
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The article “MicroStrategy Raises $875 Million in Convertible Notes, Plans More Bitcoin Purchases” originally appeared on Benzinga.com.
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