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The zero-coupon structure of the notes allows MARA to avoid regular interest payments.
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Key Takeaways
MARA Holdings successfully raised $980 million net through a $1 billion debt offering. Funds will be used for repurchasing existing notes and Bitcoin acquisitions. <?xml encoding="UTF-8"?>MARA Holdings said Thursday it had completed a $1 billion offering of zero-interest convertible senior notes. A majority of the net proceeds will be used to fund its future Bitcoin purchases.
The offering included an initial principal amount of $850 million, with an additional $150 million exercised under an option granted to initial purchasers. Following strong investor demand, MARA decided to increase the total offering from its original target of $700 million to $1 billion.
The company raised approximately $980 million in net proceeds after deducting initial purchaser discounts and commissions. MARA plans to use about $199 million to repurchase $212 million of its existing convertible notes due 2026, with the remaining funds allocated for Bitcoin acquisition and general corporate purposes.
The notes, which mature on March 1, 2030, are convertible into cash, MARA common stock, or a combination of both at the company’s discretion. The initial conversion rate is 38.5902 shares per $1,000 principal amount, equivalent to a conversion price of $25.9133 per share. This represents a 42.5% premium over MARA’s volume-weighted average price of $18.1848 on November 18, 2024.
As noted in the press release, holders can require MARA to repurchase their notes on December 1, 2027, or upon certain fundamental changes at 100% of the principal amount. Starting March 5, 2028, MARA may redeem the notes if its stock price reaches 130% of the conversion price for a specified period.
The notes are senior unsecured obligations and will not bear regular interest. MARA may pay special interest semi-annually beginning March 1, 2025, as a remedy for failing to meet reporting obligations or under certain circumstances.
MARA has committed fully to a “HODL” Bitcoin treasury policy, retaining all mined BTC and making strategic purchases.
As one of the largest publicly traded holders of Bitcoin, MARA currently holds approximately 27,562 BTC, valued at around $2.5 billion.
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