Marathon Digital Announces $250M Private Note Sale to Buy More Bitcoins
The price of a fresh $250 million offering of convertible senior notes has been made public by industry leader Marathon Digital Holdings, Inc.
The price of a fresh $250 million offering of convertible senior notes has been made public by industry leader Marathon Digital Holdings, Inc
The 2.125% interest rate notes with a 2031 maturity date are slated for private sale to qualified institutional buyers, subject to Rule 144A of the Securities Act.
In addition to the $37.5 million in notes that were originally planned, the corporation has allowed the original purchasers to purchase an additional $50 million in notes.
By August 14, 2024, if the customary closing criteria are fulfilled, the deal should be finalized.
These notes are senior unsecured obligations of Marathon Digital and have priority over other debts in the event of the company’s insolvency.
Interest payments will start in March 2025 and run twice a year until the note maturity on September 1, 2031.
But starting in September 2028, Marathon Digital will be able to cash in on the notes if certain conditions are met, such as the company’s stock price reaching 130% of the conversion price.
MARA Announces Pricing of Oversubscribed Offering of Convertible Senior Notes
Proceeds to be used primarily to acquire bitcoin and for general corporate purposes
Read the full press release: https://t.co/cyNGZyTcde
— MARA (@MarathonDH) August 13, 2024
Depending on the company’s decision, holders of these notes may convert them into cash, common stock shares of Marathon Digital, or a combination of the two.
52.9451 shares for every $1,000 of principal is the starting conversion rate, which translates to a conversion price of about $18.89 per share. Should specific circumstances arise, this conversion rate might be changed.
With this offering, Marathon Digital hopes to generate about $243.8 million, or as much as $292.5 million if the further purchase option is fully exercised.
This money will be largely used by the corporation to purchase additional bitcoin, in addition to being used for general corporate objectives like working capital, possible acquisitions, asset expansion, and debt reduction.
At present, the organization possesses about 20,800 bitcoins, surpassing the quantity held by its closest rival by more than twice.
Recently, Marathon Digital changed its approach to keep all of the bitcoin it mined on hand after selling 51% of the cryptocurrency in the second quarter to pay for running expenses.
The additional funds raised from this sale will help Marathon Digital expand as a company and continue its Bitcoin acquisition strategy.
Marathon Digital Holdings acquired Bitcoin worth $100M and switched back to the full HODL mining strategy, which means retaining mined $BTC and periodically making purchases.
MARA now holds 20,000+ BTC.pic.twitter.com/BzjGm1Kqc9
— Hiveon (@hiveonofficial) August 4, 2024
The notes and any related shares will not be registered under U.S. securities regulations, which means they cannot be sold in the public market unless they are registered or an exception applies. This offering is being made privately.
Along with the usual warning about forward-looking statements, the announcement notes that some many risks and uncertainties might cause actual results to differ materially from present expectations.
The market environment, the offering’s conclusion, and other elements mentioned in the business’s most recent SEC filings are among them. Unless mandated by law, Marathon Digital does not plan to update these forward-looking statements.
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