MicroStrategy increases convertible note offering by 25% to buy more Bitcoin

MicroStrategy has raised its convertible bond offering to $875 million and plans to use the proceeds to pay off existing debt and acquire more Bitcoin.

Business intelligence firm MicroStrategy, one of the largest institutional holders of Bitcoin (BTC), announced in a press release on Wednesday, September 18, that it has increased its 2028 convertible senior note offering by 25% to $875 million from the previously announced $700 million.

According to the press release, the company, known for its aggressive Bitcoin acquisition strategy, plans to use the net proceeds to repay all $500 million of its 6.125% senior secured notes due in 2028 and allocate the remainder to “additional Bitcoin acquisition and general corporate purposes.” MicroStrategy estimates that the net proceeds from the offering will be approximately $864.1 million, or $997.4 million if the buyers exercise their option to purchase an additional $135 million in notes in full.

MicroStrategy Seeks Institutional Backing for Bitcoin Growth

This move comes just a week after MicroStrategy purchased an additional 18,300 BTC for approximately $1.11 billion, bringing its total reserves to approximately 244,800 BTC. These BTC were purchased for a total purchase price of approximately $9.45 billion and an average purchase price of $38,585 per BTC.

The notes, bearing interest at an annual rate of 0.625%, will be sold to qualified institutional buyers under Rule 144A of the Securities Act of 1933 and will mature on September 15, 2028, according to the press release. They will be unsecured senior obligations with holders having the option to convert them into cash, shares of MicroStrategy’s Class A common stock or a combination of both.

The offering is expected to close on September 19, subject to customary conditions, MicroStrategy said.