MicroStrategy raises more than $1 billion in debt financing to buy Bitcoin

MicroStrategy closed previously announced round of senior convertible notes offering totaling $1.05 billion at a 0% coupon and maturing in 2027.

MicroStrategy Completes $1.05 Billion Offering of Convertible Notes at 0% Coupon and 50% Conversion Premium with #Bitcoin Use of Fundshttps://t.co/KHIyrhR8Nz

— Michael Saylor (@michael_saylor) February 19, 2021

The offering included notes for $150 million, issued under a purchase option that initial purchasers could exercise within 13 days after issuance. According to the statement, they completed it on February 19, 2021.

The notes were purchased by qualified institutional investors.

The notes mature on February 15, 2027, unless the company redeems or converts them earlier. After February 20, 2024, MicroStrategy may redeem all notes or any portion thereof.

The initial conversion rate of the notes is 0.6981 shares of MicroStrategy Class A common stock per $1,000 principal amount. This equates to an initial conversion price of approximately $1,432.46 per share and includes a premium of about 50% relative to MicroStrategy’s Nasdaq stock price on February 16, 2021.

The company estimates net proceeds from the bond offering at approximately $1.03 billion after deducting discounts and commissions to purchasers and placement expenses.

MicroStrategy intends to use the proceeds from the notes offering to acquire additional Bitcoin.

According to Bitcoin Treasuries, as of the time of writing the firm owns 71,079 BTC.

Earlier in December MicroStrategy issued convertible notes for $650 million. The funds raised were invested in the first cryptocurrency.

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