coinculture.com
MacroStrategy, a subsidiary of @MicroStrategy, has closed a $205 million bitcoin-collateralized loan with Silvergate Bank to purchase #bitcoin. $MSTR $SIhttps://t.co/QYw2ZgeE3U
— Michael Saylor⚡️ (@saylor) March 29, 2022
According to the press release, Silvergate Bank has provided MacroStrategy LLC, a subsidiary of MicroStrategy, with a $205 million interest-only term loan. This is essentially a Bitcoin-collateralized loan that will help MicroStrategy to buy more Bitcoin.
The loan is backed by Bitcoin that MacroStrategy has in a collateral account with a custodian that Silvergate and MacroStrategy have mutually authorized.
According to the stock exchange notification, the collateral for the non-guaranteed loan is worth approximately $820 million in Bitcoin.
It is worth noting that MicroStrategy already holds more than 0.5% of the total Bitcoin supply, with 125,051 tokens. According to Bitcoin Treasuries, Bitcoin accounts for 102% of MicroStrategy’s total market cap at the time of writing.
Source: Bitcoin Treasuries
With the new loan, MacroStrategy plans to not only purchase more Bitcoins, but it will also use the funds to pay fees and interest related to loan transactions and other corporate purposes of the two entities.
MacroStrategy intends to use the new loan not only to acquire more Bitcoins, but also to cover fees and interest related to loan transactions as well as other corporate purposes of the two companies.
“The SEN Leverage loan gives us an opportunity to further our position as the leading public company investor in bitcoin,” Saylor explained, adding that the capital will be used to convert Bitcoin into productive collateral for the business. This arrangement comes under the SEC’s Credit and Security Agreement. The loan matures on March 23, 2025, and bears interest at a floating rate, according to the securities regulator’s website.
“We’re thrilled to add MicroStrategy to our growing list of SEN Leverage borrowers,” said Alan Lane, Chief Executive Officer of Silvergate. Their creative approach to treasury management is a shining example of how institutions can use bitcoin to support and grow their business.”
Saylor, on the other hand, has long been a strong supporter of Bitcoin.
It’s only a matter of time before they all see the cyber light. #Bitcoin
— Michael Saylor⚡️ (@saylor) March 27, 2022
His Bitcoin amassing did face criticism, however. Mr.Whale, a crypto commentator, claimed last year that the company he leads is “dumping” its holdings to a “shady LLC.”
Michael Saylor was urging everyone to buy $BTC today at $51K.
He also moved all of MicroStrategy’s BTC to a shady LLC, which means he can now sell without filing with SEC.
My guess is that Saylor is dumping his $BTC holdings on those he’s actively trying to lure in.
— Mr. Whale 🐳 (@CryptoWhale) September 7, 2021