Bitcoin Miner Core Scientific Raises Senior Notes Offering to $400M

Texas-based Bitcoin mining company Core Scientific has announced the pricing of its increased offering of $400 million in 3.00% convertible senior notes due 2029. The initial offering size was $350 million, which has been increased due to favorable market conditions.

Scheduled to settle on August 19, 2024, the notes will be privately issued to qualified institutional buyers. Initial purchasers will have an option to purchase an additional $60 million in notes.

Core Scientific launches $400 million senior notes offering

According to the official press release, these unsecured notes, which accrue interest semiannually, mature on September 1, 2029, unless previously converted, redeemed or repurchased.

“Core Scientific will settle the conversions by paying or delivering, if applicable, cash, shares of its common stock or a combination of cash and shares of its common stock, at Core Scientific’s option. The initial conversion rate is 90.9256 shares of common stock per $1,000 principal amount of notes, representing an initial conversion price of approximately $11.00 per share of common stock.”

Core Scientific expects to raise approximately $386.6 million from the offering, potentially rising to $445.0 million if additional notes are purchased.

After paying down $61.2 million in outstanding borrowings and $150.0 million in senior secured notes due 2028, the remainder will be used for general corporate needs such as working capital, expenses and acquisitions .

Bankruptcy and beyond

Core Scientific filed for bankruptcy protection in December 2022 following a crypto market crash and the failure of partner Celsius. After a bankruptcy court approved its Chapter 11 restructuring plan in January, the company shed $400 million in debt and continued to operate. Since its return to the stock market, its price has risen 145% to $8.46 per share on the Nasdaq.

His pivot to artificial intelligence (AI) was crucial. For example, the mining company revealed a larger deal valued at $6.7 billion with CoreWeave, an Nvidia-backed startup and a key supplier of AI modeling technology to a chipmaker. Core Scientific will supply an additional 112 megawatts of computing power to augment CoreWeave’s operations.

Earlier this month, Core Scientific CEO Adam Sullivan told CNBC:

“We’ve seen tremendous growth since our launch in January and have been laser-focused on developing best-in-class digital infrastructure. This infrastructure advantage has allowed us to diversify revenue and reallocate certain facilities to cope to the growing need for “the kind of technology required for AI.”

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