Marathon Digital is eyeing Bitcoin growth with a $700 million convertible note.
Bitcoin miner Marathon Digital plans to privately issue $700 million in convertible senior notes due in 2030, according to a statement on November 18.
The offering, which is subject to market conditions, includes an option to purchase an additional $105 million for the initial purchasers within 13 days of issuance.
The company noted that the financing is geared toward refinancing its near-term debt by repaying $200 million of senior secured notes maturing in 2026.
Marathon also plans to use the funds for potential Bitcoin acquisitions and corporate growth, including strategic investments, asset expansion and debt repayment.
Terms of offer
The unsecured notes mature on March 1, 2030 and will begin accruing semi-annual interest in March 2025. It is sold privately to institutional buyers under Rule 144A, bypassing the U.S. securities registration.
Investors may also convert the notes into cash, Class A common stock, or a combination of the two. Marathon reserves the right to redeem the notes for cash beginning in March 2028, subject to certain conditions.
Meanwhile, the company expects bondholders holding existing 2026 convertible notes to trade Marathon stock or adjust derivatives to resolve their equity hedges. These activities may temporarily increase demand for these shares, potentially driving up their prices and increasing the effective conversion rate for the new notes. However, the company noted uncertainty about the scale of this market activity.
News of the offering has already impacted Marathon’s stock price, falling more than 6% in pre-market trading, according to Google Finance data.
fundraising
This is Marathon’s second significant convertible note issuance this year, following a $250 million raise in August for notes due 2031.
In October, the company secured a $200 million Bitcoin-collateralized line of credit from an undisclosed lender to capture strategic opportunities and support general corporate initiatives.
Marathon still plays an important role, controlling a significant part of Bitcoin mining. industry. Bitcoin holds over 27,500 BTC, worth about $2.5 billion, according to data from the Bitcoin Treasury..
This latest funding initiative reflects Marathon’s ongoing efforts to strengthen its financial position while expanding its presence in the Bitcoin mining industry.
