Marathon Digital, a company that mines Bitcoin and is listed on the Nasdaq, announced that it is increasing its debt offering to $1 billion. The offering, which will mature in 2030, initially aimed to raise $700 million but was increased to $980 million due to high demand from investors.
The zero-interest senior notes will be sold privately to qualified institutional buyers under Rule 144A of the Securities Act of 1933. Marathon stated that the notes can be converted into cash, shares of the company’s common stock, or a combination of both at the company’s discretion.
The funds raised from this offering, estimated to be around $833 million, will be used to acquire more Bitcoin for the company’s treasury. Additionally, Marathon plans to repurchase $212 million in convertible notes due in 2026.
The conversion rate for the new notes is set at 38.5902 shares of Marathon’s stock per $1,000 principal, with an initial conversion price of about $25.91 per share. This represents a 42.5% premium over the company’s average stock price.
Marathon’s Chief Financial Officer, Salman Khan, noted that this offering represents the highest premium for a zero-coupon offering since 2021. Market observers believe that this move demonstrates Marathon’s flexibility to mine or purchase Bitcoin directly, depending on cost efficiency.
The company currently holds 27,562 BTC, valued at approximately $2.5 billion, making it the second-largest public company in terms of Bitcoin holdings, behind MicroStrategy. MicroStrategy holds over 331,000 BTC, worth more than $30 billion.
Overall, the increased debt offering by Marathon Digital reflects its strategic approach to expanding its Bitcoin holdings and strengthening its position in the market. The company’s willingness to adapt to changing market conditions and investor demand showcases its commitment to long-term growth and sustainability in the cryptocurrency industry.