MARA announces 700M dollar convertible notes offering to buy more Bitcoin
Bitcoin mining company MARA Holdings, Inc. announced today that it plans to use Rule 144A of the Securities Act of 1933, as amended, to offer $700 million in convertible senior notes due 2030 in a private offering to qualified institutional buyers.
MARA $700 million convertible note sale
MARA, formerly known as Marathon Digital, anticipates giving the initial buyers of the notes the option to buy up to an additional $105 million aggregate principal amount over the course of 13 days starting on and including the date the notes are first issued, according to a press release.
There is no guarantee as to whether, when, or under what terms the offering will be completed; it is dependent upon market and other conditions, the post added.
Beginning on March 1, 2025, the notes will be senior obligations of MARA, unsecured, and subject to interest payable semi-annually in arrears on March 1 and September 1 of each year. If the notes are not repurchased, redeemed, or converted in line with their terms, they will mature on March 1, 2030. MARA may redeem all or a portion of the notes for cash on or after March 5, 2028, subject to specific conditions.
A minimum of $75 million in aggregate principal amount notes must be outstanding and not subject to redemption as of the applicable redemption notice date if MARA redeems less than all of the outstanding notes. On December 1, 2027, note holders will have the right to require that MARA buy back all or a portion of their notes for cash.
At MARA's election, the notes will be convertible into cash, shares of MARA's common stock, or a mix of cash and shares of MARA's common stock. The notes will only be convertible before December 1, 2029, under specific conditions and during specific times, and then at any moment up to the close of business on the second scheduled trading day before the maturity date.
When the offering is priced, the notes' interest rate, initial conversion rate, and other conditions will be decided. MARA anticipates that the U.S. composite volume weighted average price of MARA's common stock from 2:00 to 4:00 p.m. Eastern Daylight Time on the day of pricing will be the reference price used to determine the initial conversion price for the notes.
MARA plans to use $200 million of the proceeds from the sale of the notes
Up to $200 million of the notes' net proceeds will be used by MARA to buy back some of its current convertible notes that are due in 2026 through privately negotiated transactions. The remaining net proceeds will be used for general corporate purposes, such as working capital, strategic acquisitions, expanding its current assets, and paying off other debt and other outstanding obligations, as well as to buy more bitcoin.
MARA existing 2026 convertible notes
As part of any repurchase of the current 2026 convertible notes, MARA anticipates that holders who have hedged their equity price risk with regard to the notes and who consent to the repurchase will unwind all or a portion of their hedge positions by purchasing MARA's common stock and/or engaging in or terminating various derivative transactions involving MARA's common stock.
Mara follows Microstrategy's lead
Following a $250 million raise in August for notes maturing in 2031, this is MARA's second major convertible note issuance of the year. The business also obtained a $200 million credit line backed by Bitcoin in October in order to take advantage of strategic opportunities and fund its overall business goals.
With 27,562 Bitcoin in total, MARA is currently the largest publicly traded mining company in terms of Bitcoin holdings, according to data from Bitcoin Treasuries. With this achievement, MARA now leads the industry in Bitcoin ownership, trailing only MicroStrategy.
Bitcoin purchases by large corporations
In just the last week, major corporations have been buying Bitcoin in bulk through spot Bitcoin ETFs. MicroStrategy, Marathon Digital (now known as MARA), Metaplanet, and Semler Scientific have all increased their Bitcoin holdings.
Metaplanet purchased additional 51,780 BTC for $11.3 million
Earlier today, Metaplanet Inc., a Japanese investment firm, announced that it would buy more Bitcoin by issuing ordinary bonds worth 1.75 billion yen ($11.3 million) over a one-year period.
With the most recent bond sale, it now intends to expand its holdings even more. Bitcoin's reserve would increase by 122 when it reaches $90,000. According to MicroStrategy, between November 11 and November 17, it paid roughly $4.6 billion for an additional 51,780 Bitcoin at an average price of $88,627 per BTC.
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