MicroStrategy, a business intelligence and Bitcoin development company, has announced a plan for a private offering of $700 million in convertible senior notes, maturing in 2028. 

The offering will be made available to institutional investors under Rule 144A of the Securities Act. The company is also providing an option for buyers to purchase an additional $105 million of these notes.

These notes will be senior, unsecured obligations of MicroStrategy, with interest paid semi-annually, and they will mature in September 2028. 

Investors will have the option to convert the notes into cash, shares of MicroStrategy’s Class A common stock, or a combination of both, with the terms to be determined at the time of pricing.

Proceeds from the offering are expected to be used to redeem $500 million of the company’s existing 6.125% Senior Secured Notes due in 2028. Any remaining funds will be allocated for purchasing additional Bitcoin.

MicroStrategy announced that on September 16th, 2024, it issued a redemption notice for its Senior Secured Notes. 

These notes will be redeemed on September 26th, 2024 (the "Redemption Date") at a price of 103.063% of the principal amount, plus any accrued and unpaid interest up to the Redemption Date. 

The total redemption amount is approximately $523.8 million. However, the redemption is contingent on the successful closing and settlement of the sale of new notes.

Once the Senior Secured Notes are redeemed, all collateral tied to them, including around 69,080 Bitcoin, will be released.

The offering is subject to market conditions, and its completion is not guaranteed. The notes will remain private under the Securities Act and will not be offered for public sale.

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