- MicroStrategy completed a $3 billion offering of convertible senior notes due 2029 at a 0% coupon rate and 55% conversion premium
- The notes are convertible into cash, shares of MicroStrategy’s Class A common stock, or a combination, at MicroStrategy’s election
- MicroStrategy intends to use the net proceeds to acquire additional bitcoin and for general corporate purposes
MicroStrategy Incorporated recently announced the completion of its $3 billion offering of 0% convertible senior notes due 2029. The notes were sold in a private offering and have a conversion premium of approximately 55%.
Details of the Offering
The aggregate principal amount of the notes sold was $3 billion, including an additional $400 million purchased due to an option exercised by the initial purchasers. The notes are unsecured senior obligations of MicroStrategy that do not bear regular interest.
Maturity and Redemption
The notes will mature on December 1, 2029, unless redeemed or converted earlier. MicroStrategy may redeem the notes for cash after December 4, 2026 under certain conditions.
Conversion Rights
The notes are convertible into cash, shares of MicroStrategy’s class A common stock, or a combination, at MicroStrategy’s election. The conversion rate is initially 148.72 shares per $1,000 principal amount.
Use of Proceeds
The net proceeds from the sale of the notes were approximately $2.97 billion. MicroStrategy intends to use the proceeds to acquire additional bitcoin and for general corporate purposes.
Offering Details
The notes were offered only to qualified institutional buyers in reliance on Rule 144A under the Securities Act of 1933. The offer and sale of the notes have not been and will not be registered under the Securities Act.
Conclusion
The convertible senior notes offering further demonstrates MicroStrategy’s commitment to acquiring bitcoin as its primary treasury reserve asset. The company continues to execute on its strategy of providing investors with exposure to bitcoin.
