MicroStrategy, an American software technology company, has recently revealed the details of a new $700 million debt offering set to mature in 2032. The purpose of this offering is to acquire more Bitcoin.
The company disclosed in an official statement that the notes will be offered in a private sale to qualified institutional buyers under Rule 144A of the Securities Act of 1933. This offering has been increased from the previously announced $500 million. A portion of the proceeds will be used to purchase Bitcoin.
MicroStrategy intends to continue expanding its Bitcoin holdings with the proceeds from this offering. As of the latest data provided in its 2024 Q1 financial results, the company already possesses 214,400 BTC valued at around $14 billion.
The notes, which are unsecured senior obligations of MicroStrategy, will accrue interest at a rate of 2.25% per year, paid semi-annually on June 15 and December 15. They are due to mature on June 15, 2032, unless repurchased, redeemed, or converted earlier as per their terms.
After factoring in initial purchasers’ discounts, commissions, and estimated offering expenses, the company anticipates net proceeds of approximately $687.8 million from the sale. If the initial purchasers exercise their option to purchase additional notes in full, the total proceeds could increase to about $786 million.
MicroStrategy’s decision to increase the offering to $700 million follows a previous announcement of a plan to raise $500 million through a similar offering the day before. This move aligns with the company’s strategy to strengthen its Bitcoin holdings and presence in the cryptocurrency market.
It is worth noting that the notes are being sold under Rule 144A of the Securities Act of 1933, which means they will not be officially registered with the United States Securities and Exchange Commission (SEC). Notes traded under this rule cannot be traded in public markets without meeting specific SEC requirements.