MicroStrategy, a leading business intelligence and bitcoin development company, announced the Proposed private offering of $700 million of convertible senior notes due 2028. The offering will be made to institutional buyers under Rule 144A of the Securities Act. The company also plans to give buyers an option to purchase an additional $105 million of notes.
Just in: MicroStrategy to raise $700 million "Getting Extra #bitcoin" and redeem the senior secured notes. pic.twitter.com/2VV9PMkEd6
— Bitcoin Magazine (@BitcoinMagazine) September 16, 2024
The notes will be senior, unsecured obligations of MicroStrategy that will bear interest semi-annually and mature in September 2028. Holders of these notes may convert them into cash, shares of MicroStrategy’s Class A common stock, or a combination of the two, at the Company’s discretion. The conversion terms will be determined at the time of pricing.
MicroStrategy intends to use the proceeds to redeem all $500 million of its existing 6.125% senior secured notes due in 2028. The remaining proceeds will be allocated to acquiring additional bitcoin.
“On September 16, 2024, MicroStrategy issued a redemption notice pursuant to which the Senior Secured Notes will be redeemed on September 26, 2024 (the “Redemption Date”) at a redemption price equal to 103.063% of the principal amount, plus accrued and unpaid interest, if any, to and excluding the Redemption Date (in the aggregate of approximately $523.8 million), the redemption of the Senior Secured Notes being contingent upon the closing and settlement of the sale of the Notes,” MicroStrategy said. “Upon redemption of the Senior Secured Notes, all of the collateral securing the Senior Secured Notes, including approximately 69,080 bitcoins, will be released.”
The offering is subject to market conditions, with no guarantees as to the timing or conditions of its completion. The Notes will not be available for public sale, retaining private status under the Securities Act.
