Hassan Maishera
TL;DR
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Coinbase is selling $1 billion worth of convertible senior notes to cover its previous debts and operational costs.
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The crypto exchange is making this move amid soaring stock prices.
Coinbase Sells $1 Billion Bond to Cover Costs and Debts
Coinbase, one of the leading cryptocurrency exchanges in the world, announced on Tuesday that it intends to $1 billion in debt to institutional investors. The crypto exchange is making this move as its stock soared to a 26-month high thanks to the ongoing cryptocurrency rally.
The company is offering institutional investors convertible senior notes. The funds generated from this sale will enable Coinbase to repay its existing debts and cover its operational costs. The notes, which would mature in 2030, would increase the company’s liabilities by $1 billion, raising its debt to $4 billion.
Once the notes mature, they will be converted to Coinbase's Class A stock, cash, or a mix of the two forms of redemption. Institutional investors would be given the option to purchase another $150 million worth of notes within the first 30 days of the sale.
Coinbase’s stock price has been soaring in recent months thanks to the ongoing crypto rally. COIN is up by 63% year-to-date and traded at $256.14 at the close of the market on Tuesday.
With a market cap of $62 billion, Coinbase is one of the leading publicly traded companies in the crypto space. The company also had $5.4 billion cash on hand as of the end of last year.
