American software technology firm MicroStrategy has announced the pricing of a new $700 million debt offering due in 2032, intended to fund further Bitcoin purchases.
The official press release states that the notes will be sold in a private offering to qualified institutional buyers under Rule 144A of the Securities Act of 1933.
Initially announced at $500 million, the offering has been increased to a $700 million aggregate principal amount.
MicroStrategy plans to allocate part of the proceeds to acquiring more Bitcoin for its corporate treasury.
The company has already amassed 214,400 BTC, valued at approximately $14 billion, according to its Q1 2024 financial results.
These notes, which are unsecured senior obligations of MicroStrategy, will bear interest at a rate of 2.25% per annum.
Interest will be payable semi-annually in arrears on June 15 and December 15 each year.
The notes will mature on June 15, 2032, “unless earlier repurchased, redeemed or converted” as per their terms.
“Subject to certain conditions, on or after June 20, 2029, MicroStrategy may redeem for cash all or any portion of the notes at a redemption price equal to 100% of the principal amount of the notes to be redeemed.”
MicroStrategy estimates that the net proceeds from the sale will be approximately $687.8 million after deducting initial purchasers’ discounts, commissions, and estimated offering expenses.
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If the initial purchasers exercise their option to purchase additional notes in full, the total proceeds could reach around $786 million.
“MicroStrategy intends to use the net proceeds from the sale of the notes to acquire additional Bitcoin and for general corporate purposes.”
This move follows the firm’s announcement on June 13 to raise $500 million through a similar offering.
The expansion to $700 million underscores the Bitcoin-maxi firm’s strategy to strengthen its BTC holdings and position in the crypto market.
It’s important to note that since the notes are sold under Rule 144A of the Securities Act of 1933, they will not be officially registered with the United States Securities and Exchange Commission (SEC).
Notes traded under Rule 144A cannot be sold or bought in public markets without meeting SEC legal prerequisites.
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