2024-09-17
On September 16, 2024, MicroStrategy
has announced its third debt offering of 2024, aiming to raise $700 million by
issuing convertible senior notes due in 2028. The proceeds will be used to pay
off $500 million in existing debt and to purchase more Bitcoin.
This $700 million in convertible senior
notes, maturing in 2028.
This private offering will target
qualified institutional buyers under Rule 144A of the Securities Act of 1933.
The company has also granted initial buyers a 13-day option to purchase an
additional $105 million in notes.
The notes will be unsecured, senior
obligations of MicroStrategy and will bear interest payable semi-annually in
arrears on March 15 and September 15 of each year, beginning on March 15, 2025,
they are set to mature on September 15, 2028.
They will be convertible into cash,
MicroStrategy Class A common stock, or a mix of both. MicroStrategy may also
redeem the notes after December 20, 2027, under certain conditions.
MicroStrategy may redeem for cash all
or any portion of the notes. If MicroStrategy redeems fewer than all the
outstanding notes, at least $75 million aggregate principal amount of notes
must be outstanding and not subject to redemption as of the relevant redemption
notice date.
Holders of the notes will have the
right to require MicroStrategy to repurchase for cash all or any portion of
their notes on September 15, 2027.
The notes will be convertible into
cash, shares of MicroStrategy’s class A common stock, or a combination of cash
and shares of MicroStrategy’s class A common stock,
The proceeds from this offering will be
used to redeem $500 million in outstanding Senior Secured Notes and to purchase
additional bitcoin. The redemption of the Senior Secured Notes, scheduled for
September 26, 2024, depends on the successful closing of the new note sale.
This move is part of MicroStrategy’s
ongoing strategy to leverage debt raises for acquiring Bitcoin, making it one
of the largest public holders of Bitcoin. MicroStrategy currently holds 244,800
BTC.
