MicroStrategy Announces $700M Raise to Redeem Senior Secured Notes and Buy Bitcoin

MicroStrategy, a leading business intelligence and Bitcoin development company, has announced a proposed private offering of $700 million in senior convertible notes due 2028. The offering will be made to institutional buyers pursuant to Rule 144A of the Securities Act. The company also plans to grant an option to buyers to purchase an additional $105 million of the notes.

JUST IN: MicroStrategy to raise $700 million “to acquire additional #bitcoin” and redeem the Senior Secured Notes. pic.twitter.com/2VV9PMkEd6

— Bitcoin Magazine (@BitcoinMagazine) September 16, 2024

The notes will be senior unsecured notes of MicroStrategy, bearing interest semi-annually and maturing in September 2028. Holders of these notes may convert them into cash, shares of MicroStrategy Class A common stock, or a combination of both, at the company’s discretion. . Conversion terms will be set at the time of pricing.

MicroStrategy intends to use the proceeds to redeem all $500 million of its existing 6.125% Senior Secured Notes due 2028. The remaining proceeds will be allocated to the purchase of additional Bitcoin.

“On September 16, 2024, MicroStrategy issued a redemption notice pursuant to which the Senior Secured Notes will be redeemed on September 26, 2024 (the “Redemption Date”) at a redemption price equal to 103.063% of the principal amount plus accrued interest and outstanding, if any, up to but excluding the Redemption Date (approximately $523.8 million in the aggregate), with the redemption of the Senior Secured Notes contingent upon the closing and settlement of the note sale,” MicroStrategy said. “Upon redemption of the Senior Secured Notes, all collateral securing the Senior Secured Notes, including approximately 69,080 bitcoins, will be released.”

The offer is subject to market conditions, without any guarantee as to the timing or terms of completion. The notes will not be available for public sale, maintaining private status under the Securities Act.