Marathon Digital, a prominent Bitcoin mining company listed on Nasdaq, has announced its plans to expand its debt offering to $1 billion, set to mature in 2030. The company disclosed this information in a statement released on November 18.
The zero-interest senior notes will be offered privately to qualified institutional buyers under Rule 144A of the Securities Act of 1933. Originally aiming to raise $700 million, Marathon increased the offering to $980 million due to high demand from investors.
According to Marathon, the notes can be converted into cash, shares of the company’s common stock, or a combination of both at the company’s discretion. The net proceeds from the sale of the notes are estimated to be around $833 million, with a potential increase to $980 million if the initial purchasers exercise their option to purchase additional notes in full.
These unsecured senior notes carry no regular interest and will reach maturity on March 1, 2030, unless redeemed, converted, or repurchased earlier. A portion of the raised funds will be allocated towards acquiring more Bitcoin for Marathon’s treasury, while $212 million will go towards repurchasing convertible notes due in 2026.
The pricing details for the new notes reveal a conversion rate of 38.5902 shares of MARA stock per $1,000 principal, resulting in an initial conversion price of approximately $25.91 per share. This represents a 42.5% premium over MARA’s volume-weighted average stock price of $18.18.
Marathon’s Chief Financial Officer, Salman Khan, highlighted that this offering boasts the highest premium for a zero-coupon offering since 2021. The move is seen as a strategic decision to give Marathon the flexibility to either mine or purchase Bitcoin directly, depending on cost efficiency.
With an expected net of approximately $833 million from the offering, potentially rising to $980 million with full exercise of options, Marathon plans to utilize the funds for various purposes, including Bitcoin acquisitions, corporate expansion, strategic investments, and debt repayment.
Currently holding 27,562 BTC valued at around $2.5 billion, Marathon stands as the second-largest Bitcoin-holding public company, following only MicroStrategy, which holds over 331,000 BTC worth more than $30 billion.
In conclusion, Marathon’s decision to expand its debt offering reflects its commitment to strengthening its position in the Bitcoin market and leveraging opportunities for growth and investment.