Bitcoin development firm MicroStrategy has announced its intention to offer an aggregate amount of capital in the form of a $700 million convertible bond maturing in 2028.
The company said this private placement will be made available to qualified institutional buyers in accordance with Rule 144A of the Securities Act of 1933, as amended.
In addition to the $700 million, MicroStrategy said it is granting the initial purchasers an option to acquire an additional $105 million in bonds. The option will be exercisable within 13 days of the initial issuance of the bonds.
The company stressed that the success of this offering will depend on market conditions, which increases the level of uncertainty regarding its execution.
Purpose and use of proceeds
Net proceeds from the offering are expected to be used to acquire more Bitcoin. MicroStrategy said it plans to redeem all of its $500 million covered bonds maturing in 2028, which have an interest rate of 6.1%.
The notice to redeem these bonds was issued on September 16, and the redemption will take place on September 26, this year subject to the sale and settlement of new convertible bonds.
During a conference call on its financial results, the company said it had increased its bitcoin holdings to 226,500 bitcoins as of July 31, with a total purchase price of about $8.3 billion, at an average of $36,821 per bitcoin.
Michael Saylor ‘s long-standing confidence in bitcoin as a better means of storing value continues to influence market sentiment. In September, he bought $1.1 billion worth of bitcoins . A total of 244,800 BTC. This signals the institution’s strong belief in the long-term potential of the cryptocurrency.
Saylor’s aggressive accumulation has consistently bolstered confidence in the asset, especially among institutional investors.
