American cryptocurrency exchange Coinbase Global Inc. is planning to explore convertible senior notes as the new means of raising funds.

The Coinbase Convertible Senior Notes

Coinbase hinted at its plan to offer up to $1 billion in convertible senior notes which would be due in 2030. 

Per Coinbase’s plan, the notes will be put up for sale to institutional investors through a private offering. Upon its launch, the exchange is hoping to grant a 30-day option that would allow those who make purchases of up to an additional $150 million of the securities to cover over-allotments. 

The notes can be converted into a number of forms including cash, shares of Coinbase’s Class A common stock, or a combination, but at the company’s election. In the long run, Coinbase expects to use the proceeds to either repay at maturity or repurchase or redeem prior to maturity, its outstanding 0.50% convertible senior notes, 3.375% senior notes, and 3.625% senior notes.

Meanwhile, the outstanding 0.50% convertible senior notes are not due until 2026, neither is the 3.375% due till 2028 nor the 3.625% till 2031. Some of these net proceeds may be utilized for general corporate purchases like working capital and costs related to the capped-call transactions. Coinbase hopes to engage in a capped-call transaction with a minimum of one of its customers. 

The capped-call transactions will suffice for those Coinbase common stocks underlying the notes from the beginning.

Like Coinbase Like MicroStrategy

Business intelligence software company MicroStrategy recently made an acquisition of more Bitcoin, bringing its total holding to around 203,000 BTC. 

Each Bitcoin was purchased at an average price of $68,477, bringing the total acquisition to approximately $821.7 million. Apart from keeping up with its Bitcoin strategy, another intriguing update is that the acquisition was made using proceeds from convertible notes and excess cash. 

Only a few days before the latest purchase, MicroStrategy had upscaled its notes sale to a total of $700 million. The notes included convertible senior notes due in 2030. Also, in MicroStrategy’s case, initial purchasers were granted the option to purchase an additional $100 million worth of notes within a 13-day window following the issuance.

With Coinbase and MicroStrategy exploring this debt offering option, it is fast becoming a trend to watch out for.

The post Breaking: Coinbase Unveils Plans To Offer $1B In Convertible Senior Notes appeared first on CoinGape.

---

Filed under: News - @ January 1, 1970 12:00 am