MicroStrategy Proposes $700M Convertible Senior Notes

Bitcoin development company MicroStrategy announced its intention to offer $700 million aggregate principal amount of convertible senior notes due 2028.

The software firm said this private offering will be made available to qualified institutional buyers under Rule 144A of the Securities Act of 1933, as amended.

In addition to the $700 million, MicroStrategy said it is granting initial purchasers the option to acquire an additional $105 million in notes. This option will be exercisable within a 13-day window starting from the date the notes are first issued.

The company emphasized that the success of this offering will depend on market conditions, adding a level of uncertainty regarding its completion.

Purpose and Use of Proceeds

The net proceeds from this offering are expected to be used to acquire more Bitcoin. MicroStrategy said it plans to redeem all of its $500 million Senior Secured Notes due 2028, which carry a 6.1% interest rate.

Redemption notice for these notes was issued on September 16, and the redemption will take place on September 26, this year contingent upon the sale and settlement of the new convertible notes.

MicroStrategy Holds 244,800 BTC

In its earnings call the company reported that it expanded its Bitcoin holdings to 226,500 bitcoins as of July 31, with an aggregate purchase price of approximately $8.3 billion, averaging $36,821 per bitcoin.

Michael Saylor’s long-standing confidence in Bitcoin as a superior store of value continues to influence market sentiment. In September, he purchased $1.1 billion worth of Bitcoin. Taking the total to 244,800 BTC. This signals strong institutional belief in the cryptocurrency’s long-term potential.

Saylor’s aggressive accumulation has consistently bolstered confidence in the asset, particularly among institutional investors.