Bitcoin miner Marathon Digital plans to privately issue $700 million in convertible senior notes due in 2030, according to a Nov. 18 statement.
The offering, subject to market conditions, includes an additional $105 million purchase option for initial buyers within 13 days of issuance.
The firm noted that this fundraising is geared towards restructuring its near-term debt obligations by redeeming $200 million of senior secured notes maturing in 2026.
Marathon also intends to use the funds for potential Bitcoin acquisitions and corporate growth, including strategic investments, asset expansion, and debt repayment.
Offering terms
The unsecured notes will mature on March 1, 2030, and begin accruing semi-annual interest in March 2025. They would be sold privately to institutional buyers under Rule 144A, bypassing US securities registration.
Moreover, investors can convert the notes into cash, Class A common stock, or a combination of both. Marathon retains the right to redeem the notes for cash starting in March 2028 under specific conditions.
Meanwhile, the company expects noteholders with existing 2026 convertible notes to unwind their equity hedges by trading Marathon’s stock or adjusting derivatives. This activity could temporarily increase demand for its stock, potentially boosting its price and raising the effective conversion rate for the new notes. However, the company has noted uncertainty regarding the scale of this market activity.
According to Google Finance data, news of the offering has already weighed on Marathon’s stock price, which dropped over 6% in pre-market trading.
Fundraising efforts
This marks Marathon’s second significant convertible notes issuance this year, following a $250 million raise in August for notes maturing in 2031.
In October, the company also secured a $200 million Bitcoin-backed credit line from an undisclosed lender to seize strategic opportunities and support its general corporate initiatives.
Marathon remains a crucial player in Bitcoin mining, controlling a substantial portion of the industry. According to data from Bitcoin Treasuries, it holds over 27,500 BTC worth approximately $2.5 billion.
This latest funding initiative reflects Marathon’s ongoing efforts to solidify its financial position while expanding its presence in the Bitcoin mining industry.
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