Microstrategy Selling $400M Bonds to Buy Bitcoin — Holding to Exceed 100,000 BTC

Microstrategy will soon hold more than 100,000 bitcoins in its treasury. The company is raising $400 million by selling senior secured notes and will use the proceeds to acquire additional bitcoins.

Microstrategy Acquiring More Bitcoin

Microstrategy Inc. (Nasdaq: MSTR) announced Monday it intends to offer $400 million of “senior secured notes due 2028” in a private offering to qualified institutional buyers. The company detailed:

The notes will be fully and unconditionally guaranteed on a senior secured basis, jointly and severally, by Microstrategy Services Corporation, a wholly owned subsidiary of Microstrategy, and certain subsidiaries of Microstrategy that may be formed or acquired after the closing of the offering.

The company further explained that “The notes and the related guarantees will be secured, on a senior secured basis with Microstrategy’s existing and future senior indebtedness, by security interests on substantially all of Microstrategy’s and the guarantors’ assets, including any bitcoins or other digital assets acquired on or after the closing of the offering.”

However, “existing bitcoins as well as bitcoins and digital assets acquired with the proceeds from existing bitcoins” will not be used to secure the notes, Microstrategy clarified, elaborating:

Microstrategy’s existing approximately 92,079 bitcoins will be held by a newly formed subsidiary, Macrostrategy LLC. Microstrategy intends to use the net proceeds from the sale of the notes to acquire additional bitcoins.

At bitcoin’s current price of $36,116 at the time of writing, Microstrategy’s $400 million would acquire over 11,075 BTC. That means the company’s cryptocurrency stash would grow to more than 103,154 bitcoins.