On Thursday, MicroStrategy announced plans to offer unsecured convertible senior notes to qualified institutional buyers, set to mature in 2032. The private offering is contingent on market conditions and other factors. These notes will bear interest payable semi-annually in arrears on June 15 and December 15 each year.
The notes will mature on June 15, 2032, unless they are repurchased, redeemed, or converted according to the terms of the offering. MicroStrategy retains the right, under certain conditions, to redeem all or part of the notes for cash.
“Holders of the notes will have the right to require MicroStrategy to repurchase for cash all or any portion of their notes on June 15, 2029,” the US-based company stated.
Proceeds to Fund Bitcoin Purchases
According to the announcement, the notes are convertible into cash, shares of the company’s Class A common stock, or a combination of both. The reference price for the initial conversion will be the composite volume-weighted average of MicroStrategy’s stock from 9:30 am to 4:00 pm EDT on the pricing date.
If the sale proceeds, MicroStrategy intends to use the net proceeds to purchase additional Bitcoin, adding to its existing holdings of 214,400 BTC as of April 30, 2024. The company also plans to allocate these funds for other corporate purposes.
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