MicroStrategy Incorporated announced plans to privately offer $700 million worth of convertible senior notes due 2028, subject to market conditions, according to a Sept. 16 press release.
The company also expects to grant an option to purchase an additional $105 million in notes to initial buyers within a 13-day period following the notes’ issuance.
MicroStrategy intends to use the proceeds to redeem its $500 million senior secured notes due 2028 and potentially purchase additional Bitcoin.
Offering details
The unsecured notes will mature on Sept. 15, 2028, and bear semi-annual interest beginning in March 2025.
MicroStrategy may redeem the notes for cash starting in December 2027, with certain conditions limiting the redemption of outstanding notes. Investors can convert the notes into cash, class A common stock, or a combination of both.
The company also issued a redemption notice for its outstanding senior secured notes, with plans to redeem them on Sept. 26, 2024, contingent on the sale’s completion. The redemption will release the 69,080 Bitcoin held as collateral for the secured notes.
The notes will be offered in a private sale, not registered under US securities laws, and available only to qualified institutional buyers under Rule 144A.
Broader strategy
MicroStrategy’s latest plan to issue $700 million in convertible senior notes is part of a broader strategy the company has employed over the past few years to finance its aggressive Bitcoin accumulation.
Since 2020, MicroStrategy has raised billions through similar offerings, using a combination of debt and equity to fund its crypto purchases. In fact, this is the fourth significant note offering since the company began accumulating Bitcoin as its primary treasury asset.
In 2024 alone, MicroStrategy completed a $603.75 million offering of convertible senior notes with a 0.875% interest rate, maturing in 2031. The company used the proceeds to acquire additional Bitcoin and further its corporate strategy of integrating the crypto into its financial structure
The move followed a similar approach earlier in the year, when MicroStrategy raised $800 million through another convertible note offering with a 0.625% rate, maturing in 2032.
MicroStrategy’s adoption of Bitcoin has positioned it as the largest corporate holder of the asset, with over 244,800 BTC valued at approximately $14.2 billion. The company continues to use these debt offerings to both manage its existing debt load and purchase more Bitcoin.