- On March 12, Coinbase announced a $1 billion bond issue maturing in 2030.
- The company plans to use the funds to pay down debt and acquire other organizations.
On March 12, 2024, Coinbase announced plans to raise additional funds through a $1 billion bond offering, designated as senior convertible notes due 2030.
“The bonds will accrue interest, payable semi-annually. They will mature on April 1, 2030, unless redeemed, repaid or converted earlier,” the firm said in a statement.
Note that senior preferred notes are debt securities whose holders have some benefit in a company’s liquidation.
The offer also includes options to purchase an additional $150 million in bonds with 30-day maturity. These will be used to cover the costs associated with the asset reallocation.
According to the press release, Coinbase intends to use the proceeds to repay debt, pay for potential capped transactions and acquire other firms.
In this way, the company decided to avoid selling Coinbase shares and preserve its shareholder value. By utilizing the debt market for funding, Coinbase is following the strategy followed by MicroStrategy founder Michael Saylor.
As a reminder, Microstrategy has acquired about 200,000 BTC, which is valued at nearly $15 billion as of this writing. Most of it is funded by the sale of more than $2 billion in convertible bonds.
In March 2024, MicroStrategy announced a $600 million bond issue maturing in 2030. Initial purchasers will have the opportunity to purchase up to $90 million in securities within 13 days of issuance.
