MicroStrategy has made a significant change to its financing strategy, raising the amount through convertible senior notes from $700 million to $875 million. There is also an additional $135 million option for initial purchasers.
Increase in Financing Amount
MicroStrategy, one of the largest holders of Bitcoin, has announced its intention to increase the amount raised through convertible senior notes to $875 million. This suggests that the company plans to further expand its cryptocurrency holdings. The company's head, Michael Saylor, has often emphasized that Bitcoin is a central asset in their long-term strategy.
Terms and Conditions
These notes will be sold privately to qualified institutional buyers at an interest rate of 0.625% per annum, relying on Rule 144A of the Securities Act. The offering is set to close tomorrow, Sept. 19, 2024, with these unsecured senior obligations maturing on Sept. 15, 2028. Early redemption can start in December 2027, subject to the condition that MicroStrategy's stock performance exceeds 130% of the conversion price over a specified period.
Use of Funds
The company plans to use the proceeds from the offering, expected to be around $864.1 million, to redeem $500 million in 6.125% Senior Secured Notes in 2028. Once this buyback is complete, the collateral securing the Senior Secured Notes, including around 69,080 BTC, will be released. Any remaining proceeds may also be used to buy more Bitcoin, indicating the company's confidence in cryptocurrency.
MicroStrategy remains committed to investing in Bitcoin, increasing its financing through convertible senior notes. This move underscores the company's long-term confidence in cryptocurrency and its central role in strategic plans.
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