MicroStrategy successfully closes 800 million convertible note offering at 225 to fund Bitcoin acquisitions

MicroStrategy Incorporated, a US-based company that provides business intelligence, cloud-based services, and mobile software, has achieved a significant milestone. According to a press release from the company, it has successfully completed a convertible-note offering worth up to $800 million, with a coupon rate of approximately 2.25% and a conversion premium of 35%.
MicroStrategy Completes $800 Million Convertible-Note Offering at 2.25% Coupon and 35% Conversion Premium
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June 20, 2024
MicroStrategy Successfully Concludes $800 Million Convertible-Note Offering at 2.25% Coupon
The company stated that the total principal amount of the notes offered was around $800 million. This figure includes a principal amount of $100 million for notes with a purchase option. The notes were sold through a private offering, targeting eligible institutional purchasers in accordance with Rule 144A of the Securities Act of 1933.
According to MicroStrategy, the notes carry an annual interest rate of approximately 2.25%. They are unsecured and can be paid semi-annually in arrears. Payment dates are scheduled for June 15th and December 15th of each year, beginning on December 15th, 2024.
Users Have the Option to Pay the Notes Semi-Annually on June 15th and December 15th of Each Year
Unless repurchased, converted, or redeemed earlier, the notes will mature on June 15th, 2032. Note holders have the option to require the company to repurchase the notes on June 15th, 2029, or on certain events. In the case of a repurchase, the price will be equal to 100% of the principal amount of the notes, subject to any adjustments due to a fundamental change as defined in the indenture governing the notes.
Users can convert the notes into cash or shares of MicroStrategy’s Class A stock. The initial conversion rate is 0.4894 shares per $1,000 principal amount. MicroStrategy intends to use the net proceeds from the offering to purchase additional Bitcoin as part of its overall corporate strategy.
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