- Coinbase is offering $1 billion in convertible senior notes due in 2030 in a private offering, with an option for initial purchasers to buy an additional $1.5 billion to cover over-allotments.
- The notes will mature in 2030, pay interest semiannually, and are convertible into cash, stock, or a combination at Coinbase’s election.
- Coinbase intends to use the proceeds to repay existing notes, as well as for working capital, capex, capped call transactions, and investments.
Coinbase Global Inc. announced on March 12, 2024 its intention to offer $1 billion in convertible senior notes due in 2030 in a private offering. The company also expects to grant initial purchasers a 30-day option to buy an additional $1.5 billion in notes to cover over-allotments.
Details of the Offering
The notes will be senior unsecured obligations of Coinbase that mature on April 1, 2030, unless earlier repurchased, redeemed or converted. Interest is payable semi-annually.
The notes are convertible into cash, Coinbase Class A common stock, or a combination at Coinbase’s election. The interest rate, initial conversion rate and other terms will be set at pricing.
Coinbase expects to enter into privately negotiated capped call transactions with initial purchasers or affiliates to reduce potential dilution. The capped calls are expected to reduce dilution upon conversion of the notes.
Coinbase has been advised the option counterparties expect to enter into derivative transactions and/or purchase Coinbase stock concurrently or after pricing to establish hedges. This could impact the market price of Coinbase’s stock and notes. The counterparties may also modify hedge positions before maturity which could affect stock price and note conversion.
Use of Proceeds
Coinbase intends to use the net proceeds to repay outstanding convertible senior notes due in 2026, senior notes due in 2028 and 2031. Proceeds may also be used for working capital, capital expenditures, capped call transactions, and investments in companies or technologies.
Additional Details
The notes will only be offered to qualified institutional buyers under Rule 144A. The notes and any shares issuable upon conversion have not been and will not be registered under the Securities Act.
The announcement does not constitute an offer to sell or solicitation to buy the notes or any shares of Coinbase stock.
