MicroStrategy Plans $700 Million Senior Notes Offering for Bitcoin Acquisitions

MicroStrategy Incorporated has revealed its intention to conduct a private offering of $700 million in convertible senior notes due 2028, as outlined in a press release dated September 16. The company plans to grant initial buyers an option to purchase an additional $105 million in notes within a 13-day period following the issuance.

The purpose behind this offering is for MicroStrategy to utilize the proceeds to redeem its existing $500 million senior secured notes due 2028 and potentially acquire more Bitcoin. The unsecured notes are set to mature on September 15, 2028, and will accrue semi-annual interest starting in March 2025.

Investors will have the flexibility to convert the notes into cash, class A common stock, or a combination of both. MicroStrategy also issued a redemption notice for its current senior secured notes, with plans to redeem them on September 26, 2024, contingent upon the completion of the sale. This redemption will release the 69,080 Bitcoin held as collateral for the secured notes.

The offering of these notes will be conducted privately and will not be registered under US securities laws, making them accessible only to qualified institutional buyers under Rule 144A.

This move is part of MicroStrategy’s broader strategy to finance its ongoing accumulation of Bitcoin. The company has been raising significant funds since 2020 through various offerings involving debt and equity to support its crypto purchases. This latest offering marks the fourth substantial note offering since MicroStrategy began incorporating Bitcoin as a primary treasury asset.

In 2024, MicroStrategy completed a $603.75 million offering of convertible senior notes with a 0.875% interest rate and maturation in 2031, using the proceeds to acquire additional Bitcoin. This followed a similar approach earlier in the year when the company raised $800 million through another convertible note offering with a 0.625% rate, maturing in 2032.

MicroStrategy’s strategic adoption of Bitcoin has positioned it as the largest corporate holder of the asset, with holdings exceeding 244,800 BTC valued at approximately $14.2 billion. The company continues to leverage these debt offerings to manage its existing debt load and further expand its Bitcoin portfolio.