MARA Holdings (MARA) offers $700 million of convertible senior notes to acquire more Bitcoin

U.S.-based Bitcoin miner Marathon Digital Holdings, Inc. has announced an offering of $700 million of convertible senior notes. According to the firm’s official announcement, the notes will be issued to institutional participants who meet certain criteria and qualifications through a private listing.

Institutions that participate in the sale will receive another option from the miner to purchase additional notes worth $105 million within 13 days commencing on the date the notes are initially issued to investors. The two offerings will be issued according to Rule 144A under the Securities Act of 1933.

Today, we announced a proposed private offering of $700 million of convertible senior notes.⁰⁰Proceeds to be used primarily to acquire bitcoin, repurchase existing convertible notes due in 2026, and for general corporate purposes. https://t.co/0vg7ri8BDX

— MARA (@MARAHoldings) November 18, 2024

The miner announced that the notes will bear interest payable semi-annually on March 1 and September 1 of every year. The first interest areas will be paid on March 1, 2025, and the notes will mature on September 1st, 2031, unless the firm redeems, converts, or repurchases the notes. The final terms of the notes are still unclear but will be determined at a later date.

MARA to use $200 million of the proceeds to repurchase outstanding convertible notes

The miner revealed that $200 million of the $700 million raised will be used to repurchase part of its outstanding 2026 convertible notes. The remaining amount will be directed towards increasing the company’s Bitcoin holdings through additional purchases alongside other general needs such as expansions, debt repayments, and acquisitions. The notes’ due date and maturity are scheduled for 2030, after which they can be converted into cash or shares according to MARA’s preference.

MARA’s share price declined by 5% to $19.97 during pre-market trading following the announcement.

“MARA expects to use up to $200 million of the net proceeds from the sale of the notes to repurchase a portion of its existing convertible notes due 2026 in privately negotiated transactions, with the remainder of the net proceeds to be used to acquire additional bitcoin and for general corporate purposes.”

MARA

The miner made a similar announcement in August 2024. MARA released a private offering of $250 million of convertible senior notes and an additional $37.5 million worth of notes granted to the initial purchasers. The company announced that part of the proceeds will be used to purchase more Bitcoin and the rest for general corporate purposes such as working capital and strategic expansion of existing assets.

MARA now holds 27,562 bitcoins worth $2.49 billion

According to data from Bitcoin Treasuries, Marathon Digital has 27,562 bitcoins worth $2.49 billion. The company recently added 720 bitcoins to its balance sheet on October 31st and 642 bitcoins on October 2nd. The company trails behind the crypto giant and software company MicroStrategy as the second-largest corporate holder of Bitcoin globally.

The miner’s offerings mimic previous announcements by Metaplanet and Microstrategy. On November 18th, Metaplanet announced the issuance of one-year bonds entirely dedicated to BTC purchases to increase its Bitcoin stockpile. The Tokyo-listed firm issued the ordinary bonds with a guarantee totaling 1.75 billion yen or $11.3 million for an annualized interest rate of 0.36%.

Similarly, Microstrategy, the world’s largest corporate Bitcoin holder, disclosed that it had initiated a sales agreement with various partners and had raised upwards of $2 billion. The company also announced it had purchased an additional 27,200 bitcoins for $2.03 billion.