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MicroStrategy Boosts Bitcoin-Linked Junk Bond to $500M

MicroStrategy Boosts Bitcoin-Linked Junk Bond to $500M
  • MicroStrategy Inc. raised the size of a junk bond sale to buy more Bitcoin.
  • They announced the pricing of $500M of 6.125% Senior Secured Notes due 2028.
  • Originally, the company planned to issue $400 million of debt.

On Tuesday, MicroStrategy Inc. raised the size of a junk bond sale to buy more Bitcoin, selling $500 million notes in the high-yield market. According to its official announcement, the notes will be sold in a private offering to qualified institutional buyers. Furthermore, it is expected to close on June 14, 2021, subject to satisfaction of customary closing conditions.

Michael Saylor, CEO and Chairman of MicroStrategy (MSTR) further announced this on a tweet saying, ’MicroStrategy announces pricing of $500 Million of 6.125% Senior Secured Notes due 2028 to acquire additional Bitcoin’

Originally, the company planned to issue $400 million of debt but they saw a high demand on its launch date. Hence, it sold the secured notes at a yield of 6.125%. On a previous announcement, Saylor tweeted,

By far, they already issued convertible bonds worth around $1 billion in its aims to scoop up more BTC. However, this is the first-ever corporate bond sale with proceeds earmarked for such purchases as Saylor continues on his quest to make it an official corporate strategy.

MicroStrategy is the largest independent publicly traded business intelligence firm. The company has been consistently buying bitcoins since 2020. Apart from this, the company said that its existing 92,079 bitcoins will be held by a newly formed subsidiary, MacroStrategy LLC.

It should be noted, a bond is a debt or a promise to pay investors interest payments along with the return of invested principal in exchange for buying the bond. However, junk bonds are those that carry a higher risk of default than most bonds issued by the government and corporations.

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Britney is a market analyst who covers stories about the cryptocurrency world. She holds a Business Administration Degree in Finance and aims to let the readers understand crypto from a beginner perspective.