Japan’s Metaplanet borrows $31.91M via bonds to buy Bitcoin

Metaplanet Inc. announced that it is issuing its Series 5 Common Notes for ¥5 billion through a private placement with EVO FUND to purchase more Bitcoin.

In an announcement released today, December 20, the company announced the issuance of Series 5 Common Notes to raise approximately $31.91 million through the EVO FUND. This news closely follows the company’s previously announced intention to issue up to ¥5 billion of ordinary bonds.

Proceeds from this issuance will be allocated to the purchase of Bitcoin (BTC), as detailed in the company’s announcement dated November 28, 2024, regarding the issuance of Series 12 Stock Call Rights with Strike Price Adjustment Provision and the accompanying Stock Call Rights Purchase. Agreement.

*Metaplanet will issue 5.0 billion yen of Common Bonds to Accelerate Bitcoin Purchases; Refund will be made from Warrant Exercise Revenues* pic.twitter.com/9Sr6a5kDkD

— Metaplanet Inc. (@Metaplanet_JP) December 20, 2024

Series 5 Bonds bear no interest and the principal, when redeemed, is equivalent to 100 yen for every 100 yen of the bond amount. Each bond is valued at $1.59 million (¥250 million), with full payment due on December 20, 2024. The Notes will mature on June 16, 2025, but may be redeemed early upon request of EVO FUND by: written notice to Metaplanet Inc. The Notes may also be redeemed early where the proceeds from the exercise of the Series 12 Stock Purchase Rights are multiple complements. multiples of the principal amount of the bond.

These are not guaranteed or collateralized and are offered solely to EVO FUND. Pursuant to Article 702 of the Companies Law and Article 169 of the Regulation on the Enforcement of the Companies Law, no trustee will be appointed for the bonds. Metaplanet Inc. will pay all principal and interest from its office in Roppongi, Minato-ku, Tokyo.

Metaplanet Inc. stated that the issuance will not have a material impact on Metaplanet Inc.’s consolidated financial results for the fiscal year ending December 31, 2024. However, the company promised to disclose any material changes or material impacts in a timely manner. About its financial outlook as a result of this deal.

Metaplanet borrows money to buy Bitcoin

Metaplanet’s strategy of issuing bonds for BTC purchases is not the same process as buying BTC directly. Instead of using its own money, the company now borrows and sells bonds to investors like EVO FUND. This means that whether BTC performs well or not, they will have to pay back the money they borrowed later. Although this allows them to invest in BTC without spending their own cash reserves, it also adds some financial liabilities and risks in case the value of BTC decreases. This is the company’s way of investing in BTC on borrowed time but must repay that debt in the future.