MicroStrategy has completed its offering of 0.625% convertible senior notes due 2028. The company raised $1.01B from eligible institutional purchasers using Rule 144A of the Securities Act.
The notes will mature on September 15, 2028, providing a 0.625% yearly interest rate. Holders can convert them to cash, MicroStrategy's class A common stock, or a combination of the two. The initial conversion rate is 5.4589 shares for each $1,000 principal amount. This equates to $183.19 per share.
MicroStrategy intends to use the cash for two primary purposes: first, to redeem $500 million of its 6.125% Senior Secured Notes due 2028. Then, they want to purchase additional bitcoin and cover regular company expenditures.
The repayment of the Senior Secured Notes will free up around 69,080 Bitcoins. These are now serving as collateral. This private offering was only open to qualified institutional purchasers. The Securities Act does not require registration of the notes or their linked common stock. This restricts their resale.
MicroStrategy's decision is more related to debt management rather than bitcoin investing. Whatever happens, MicroStrate still continues to be a name to follow on institutional bitcoin interest.
