MicroStrategy Plans to Issue $700 Million Convertible Bonds, Targeting More Bitcoins

The company engaged in business intelligence software, MicroStrategy, this time announced its plans to offer company conversion bonds worth $700 million

Jakarta - A company engaged in business intelligence software, MicroStrategy, this time announced its plan to offer company conversion bonds with a value of US$700 million which will mature in 2028, according to market conditions.

The announcement was made by MicroStrategy through a press release on Tuesday (16/9/2024). Michael Saylor's company also plans to provide an additional US$105 million (Rp1.68 trillion) for early buyers in the 13-day period following the bond issuance.

MicroStrategy plans to use the funds raised from this bond offering to redeem a guaranteed previous bond of US$500 million (Rp8 trillion) due in 2028, and has the potential to buy more Bitcoins. The unsecured bonds will mature on September 15, 2028, with interest paid semi-yearly starting March 2025.

MicroStrategy has the option to redeem bonds in cash from December 2027, with certain conditions limiting the ransom of bonds still in circulation. Investors also have the option to convert these bonds into cash, grade A regular shares, or a combination of both.

Also Read:In addition, the company has issued a redeeming notice for the previous bonds, which are scheduled to be redeemed on September 26, 2024, depending on the settlement of the sale. This relief will free 69,080 Bitcoins that are currently used as bond guarantees, reported by DL News.

These bonds will be offered in private sales and are not registered under US securities law, available only to institutional buyers who meet the requirements according to Rule 144A.

MicroStrategy and BitcoinMicroStrategy's latest plan to issue a $700 million conversion bond is part of a strategy that has been implemented over the past few years to fund Bitcoin accumulation aggressively.

Since 2020, the company has raised billions of dollars through similar offerings, using a combination of debt and equity to support their Bitcoin purchases.

In 2024, MicroStrategy successfully completed a bond offering of US$603.75 million (Rp9.66 trillion) with an interest rate of 0.85%, due in 2031. The funds were used to buy more Bitcoins and strengthen the company's strategy and integrate these crypto assets into their financial structure.

This effort resembles a similar approach carried out earlier in the year, when MicroStrategy raised $ 800 million (Rp. 12.8 trillion) through a conversion bond offering with an interest rate of 0.625%, due in 2032.

For additional information, currently MicroStrategy is the largest corporate holder of Bitcoin, with more than 244,800 BTC which is valued at around 14.2 billion US dollars (Rp227.2 trillion).