MicroStrategy, a leading business intelligence and Bitcoin development company, has announced a proposed private offering of $700 million of convertible senior notes due 2028. The offering will be made to institutional buyers pursuant to Rule 144A under the Securities Act. The company also plans to grant an option for the purchasers to purchase an additional $105 million of the notes.
BREAKING: MicroStrategy to raise $700 million "To acquire additional #bitcoin" and redeem Senior Secured Bonds. photo.twitter.com/2VV9PMkEd6
— Bitcoin Magazine (@BitcoinMagazine) September 16, 2024
The notes will be senior unsecured obligations of MicroStrategy, bearing interest semiannually and maturing in September 2028. Holders of these notes may convert them into cash, shares of MicroStrategy Class A common stock, or a combination of both, at the company’s discretion. Conversion terms will be determined at pricing.
MicroStrategy intends to use the proceeds to redeem $500 million of its 6.125% senior secured notes due 2028. The remaining proceeds will be used to purchase additional bitcoins.
“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 the Redemption Date (approximately $523.8 million in the aggregate), with redemption of the Senior Secured Notes contingent upon the closing and settlement of the sale of the notes,” MicroStrategy stated. “Upon redemption of the Senior Secured Notes, all collateral supporting 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 terms of completion. The bonds will not be available for public sale, maintaining their private character in accordance with the Securities Law.
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