Coinbase Plans to Raise $1.5 Billion Through Senior Notes

Coinbase is looking to raise $1.5 million to strengthen its balance sheet

• The Coinbase cryptocurrency exchange is looking to raise $1.5 billion in capital through a private offering of senior notes. In an announcement published earlier today, the exchange says that the notes it intends to offer notes due in 2028 and 2031. The offering will be only made available to institutional investors. Currently, it’s currently unclear how much interest buyers will be earning on the notes, or what the conditions for redeeming the notes will be – Coinbase says it plans to determine this through negotiations with purchasers.
• Convertible senior notes are a type of debt security that can be converted into shares of the company that’s issuing them. In the event of a bankruptcy, holders of convertible senior notes are prioritized over those who hold other debt securities and equity in the company. Convertible senior notes are popular among companies because they provide access to capital at a relatively low cost.
• According to Coinbase, the proceeds from the raise would go towards strengthening the company’s balance sheet with “low-cost capital”. Some of the potential uses of the capital outlined by Coinbase include product development as well as acquisitions and investments in other products and technologies.
• This isn’t the first time that Coinbase is using debt financing to get access to more capital. In May, the company said that it was planning a private debt offering of $1.25 billion in convertible senior notes.
• Coinbase, which trades on the NASDAQ stock exchange under the ticker COIN, dropped by 2.66% today amidst a lackluster performance displayed by the cryptocurrency market. Coinbase is also facing some uncertainty on the regulatory front, with the SEC allegedly threatening to sue the company over a planned product which would allow customers to earn interest by lending out their crypto assets.