Coinbase upsizes debt offering to $2 billion

The cryptocurrency exchange Coinbase increased the size of the offering for two senior notes from $1.5 billion to $2 billion. Moody’s rated them junk.

According to the press release, the company expanded the debt offering in response to market demand.

On September 13, 2021, Coinbase announced the offering of senior notes with a call option due 2028 and 2031 for $1.5 billion.

The size of each issue will now be $1 billion. The notes due 2028 will pay a coupon of 3.375% per year, and the 2031 notes 3.625%.

“Coinbase intends to use the net proceeds from the offering for general corporate purposes, which include the development of new products and potential investments or acquisitions of other companies, products or technologies,” the statement reads.

The offering is expected to close on September 17.

Against the backdrop of the debt offering, Moody’s assigned the company’s bonds a Ba1 rating, which denotes a non-investment or “junk” level (junk bonds).

In Moody’s assessment, it cited the exchange’s strong dependence on cryptocurrency prices and trading volumes, intense industry competition, regulatory changes, and cybersecurity risks.

Earlier, Coinbase faced a threat of legal action from the U.S. Securities and Exchange Commission (SEC) should it launch savings accounts.

SEC Chair Gary Gensler has said that many assets listed on crypto exchanges are unregistered securities, and regulators must crack down on them.

Subscribe to ForkLog news on VK.