cryptoslate.com
The bonds, designated as unsecured convertible senior notes, are set to mature in 2030, offering investors the option to convert their holdings into Coinbase shares or cash at that time. The offer also includes a 30-day option to buy an additional $150 million principal amount of notes to cover over-allotments.
The strategy is seen as a savvy maneuver to capitalize on the crypto market’s positive momentum while safeguarding shareholder value.
Coinbase has also introduced “negotiated capped call transactions” as part of the bond offering. This measure is designed to mitigate the dilutive impact on shareholders when the debt is converted into equity.
The proceeds from the bond offering are earmarked for a variety of uses, including debt repayment, funding for the capped call transactions, and potential acquisitions, indicating Coinbase’s ambitious agenda for growth and consolidation within the crypto economy.
Coinbase stock surging with crypto
This announcement comes on the heels of a significant upsurge in the value of Bitcoin, which recently hit a record high, crossing the $73,000 mark.
The bullish trend in the crypto market has been paralleled by a 48% increase in Coinbase’s stock price this year to levels last seen in December 2021 — a rally that has prompted some Wall Street analysts to revise their previously cautious outlooks on the company’s stock.
Financial giants like Raymond James and Goldman Sachs have shifted from bearish to more optimistic views, buoyed by the sector’s robust performance.
As of press time, COIN was trading at $256.14, up 11.91% over the past week and 82.45% over the previous month.
Coinbase previously offered $1.25 billion in senior convertible notes in May 2021, which instead took place following a market crash related to the collapse of the TerraUSD stablecoin. The firm has regularly repurchased its outstanding debt.