In a recent development, the American software technology company MicroStrategy has disclosed the pricing details of a new $700 million debt offering set to mature in 2032, aimed at acquiring more Bitcoin. The company revealed in an official statement that the notes will be offered in a private placement to qualified institutional buyers under Rule 144A of the Securities Act of 1933. This offering represents an increase from the initially planned $500 million aggregate principal amount. MicroStrategy intends to utilize a portion of the funds raised to purchase BTC.
The company plans to bolster its corporate treasury by adding more Bitcoin (BTC) with the proceeds from the offering. As per the latest financial results for Q1 of 2024, MicroStrategy has already accumulated 214,400 BTC, valued at approximately $14 billion.
The unsecured senior notes of MicroStrategy will carry an annual interest rate of 2.25%, payable semi-annually on June 15 and December 15 each year. The notes are set to mature on June 15, 2032, unless repurchased, redeemed, or converted as per the terms defined.
After accounting for initial purchasers’ discounts, commissions, and offering expenses, MicroStrategy estimates that the net proceeds from the sale would amount to around $687.8 million. If the initial purchasers exercise their option to acquire additional notes in full, the total proceeds could potentially reach $786 million.
This move by MicroStrategy on June 14 comes shortly after the company’s announcement of a plan to raise $500 million through a similar offering on June 13. The increase to $700 million underlines the company’s strategic approach to enhance its BTC holdings and strengthen its position in the cryptocurrency market.
It is worth noting that selling the notes under Rule 144A of the Securities Act of 1933 means that they will not be formally registered with the United States Securities and Exchange Commission (SEC). Notes traded under this rule cannot be transacted in public markets without meeting the legal requirements set by the SEC.