As became known yesterday, on Sep. 19, MicroStrategy successfully completed its offering of convertible senior notes with a 0.625% coupon, raising over $1 billion.
Capital Raising
The total amount raised reached $1.01 billion, including $135 million from an option exercised by initial purchasers, showcasing strong demand in the private market where the notes were sold to qualified institutional buyers.
Use of Proceeds
MicroStrategy plans to use the net proceeds from this offering, amounting to approximately $997.4 million after fees, to fully redeem the outstanding half a billion of its 6.125% senior secured notes due 2028. The remaining proceeds will be allocated for general corporate purposes, including the acquisition of additional Bitcoin, emphasizing the company's continued commitment to this cryptocurrency.
Bond Conditions
These unsecured notes represent a significant move for MicroStrategy, with interest payments set to start on March 15, 2025. The notes will mature on Sep. 15, 2028, unless the company decides to redeem or convert them earlier. Notably, the company can redeem the notes for cash starting Dec. 20, 2027, if the stock price of MSTR reaches at least 130% of the conversion price.
This bond offering allows MicroStrategy not only to address current financial obligations but also to strengthen its position in the cryptocurrency market by continuing to actively acquire Bitcoin.
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