MicroStrategy, an American software technology company, has revealed the details of a new $700 million debt offering set to mature in 2032, which it intends to use for additional Bitcoin purchases.
In an official statement, the company announced that the notes will be offered in a private sale to qualified institutional buyers under Rule 144A of the Securities Act of 1933. The offering has been increased from the initial $500 million amount. MicroStrategy plans to allocate a portion of the funds raised to acquire more BTC.
The company aims to continue expanding its corporate treasury with Bitcoin, having already amassed 214,400 BTC valued at $14 billion as per the latest data from its 2024 Q1 financial results.
The notes, which are unsecured senior obligations of MicroStrategy, will carry an interest rate of 2.25% per annum, payable semi-annually on June 15 and December 15 each year.
The maturity date for the notes is set for June 15, 2032, subject to early repurchase, redemption, or conversion as outlined in the terms.
MicroStrategy anticipates net proceeds of approximately $687.8 million from the offering, after accounting for discounts, commissions, and offering expenses. If the initial purchasers exercise their option to buy additional notes, the total proceeds could reach around $786 million.
This move by MicroStrategy on June 14 follows its recent announcement of a plan to raise $500 million through a similar offering on June 13. The increase to $700 million aligns with the company’s strategic initiative to bolster its BTC holdings and presence in the cryptocurrency market.
It’s worth noting that the notes being sold under Rule 144A of the Securities Act of 1933 are not registered with the U.S. Securities and Exchange Commission (SEC). As such, these notes cannot be traded in public markets without meeting specific SEC requirements.
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