Marathon Digital, a prominent Bitcoin miner, has announced plans to privately issue $700 million in convertible senior notes due in 2030, as per a statement released on November 18.
The offering, contingent on market conditions, includes an additional $105 million purchase option for initial buyers within 13 days of issuance. The primary objective of this fundraising initiative is to restructure the company’s near-term debt obligations by redeeming $200 million of senior secured notes set to mature in 2026.
In addition to debt repayment, Marathon intends to utilize the funds for potential Bitcoin acquisitions, corporate growth, strategic investments, and asset expansion. The unsecured notes, which will mature on March 1, 2030, will begin accruing semi-annual interest in March 2025. These notes will be offered privately to institutional buyers under Rule 144A, thereby bypassing US securities registration requirements.
Investors will have the flexibility to convert the notes into cash, Class A common stock, or a combination of both. Starting in March 2028, Marathon reserves the right to redeem the notes for cash under specific conditions. The company anticipates that noteholders with existing 2026 convertible notes will unwind their equity hedges through stock trading or derivatives adjustment, potentially increasing demand for Marathon’s stock and influencing its price.
Marathon’s stock price has already experienced a slight decline of over 6% in pre-market trading following the announcement of the offering. This marks the company’s second significant convertible notes issuance this year, following a $250 million raise in August for notes maturing in 2031. In October, Marathon secured a $200 million Bitcoin-backed credit line from an undisclosed lender to support strategic opportunities and general corporate initiatives.
With a substantial holding of over 27,500 BTC valued at approximately $2.5 billion, Marathon remains a key player in the Bitcoin mining industry. This latest fundraising effort underscores Marathon’s commitment to strengthening its financial position and expanding its presence in the Bitcoin mining sector.
In conclusion, Marathon Digital’s $700 million convertible senior notes issuance signifies its continued drive to fortify its financial standing and capitalize on growth opportunities within the Bitcoin mining industry.