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Coinbase Seeks to Raise $1.5B Senior Notes to Power its Product Development

Nasdaq-listed cryptocurrency exchange Coinbase Global Inc has announced its plans to raise new capital by issuing $1.5 billion aggregate principal amount of its Senior Notes to potential investors.

Per the announcement, the Senior Notes will be due by 2028 and 2031 in a private offering. According to the Brian Armstrong-led firm, “the interest rate, redemption provisions, and other terms of each series of notes will be determined by negotiations between Coinbase and the initial purchasers.”

Purpose of the Senior Notes

Senior Notes are a form of debt offerings that takes priority over other unsecured loan options. It has become one of the most effective tools that companies use to pull capital with more flexibility.

Coinbase has big plans for the funds that will be realised through the issuance of the Senior Notes. The company specialised its plans in detail in the official press release stating that:

“This capital raise represents an opportunity to bolster our already strong balance sheet with low-cost capital. Coinbase intends to use the net proceeds from the offering for general corporate purposes, which may include continued investments in product development, as well as potential investments in or acquisitions of other companies, products, or technologies that Coinbase may identify in the future. The closing of the offering is subject to market and other conditions.”

Coinbase reaffirmed that the Senior Notes are only available to entities considered as institutional investors in adherence to American securities law.

MicroStrategy Senior Notes Issuance

With the leeway to utilise the proceeds from Senior Convertible Notes, MicroStrategy Incorporated made a shocking move to the world when it raised about $1.05 billion, as reported by Blockchain.News back in February. The realised funds were injected into the purchase of Bitcoin (BTC), which has become the flagship asset the business intelligence firm has adopted as its Treasury Reserve Asset to wade off the effects of inflation.

Coinbase Announces Cash Tender Offer for $150 Million of 3.625% Senior Notes Due 2031

Coinbase Global, Inc. has announced the commencement of a cash tender offer for up to $150.0 million of its outstanding 3.625% Senior Notes due 2031. The announcement was made on August 7, 2023, and the details were provided in a press release distributed by Blockchain.News.

Coinbase, a leading platform in the cryptoeconomy, is building a more fair, accessible, efficient, and transparent financial system enabled by crypto. The company started in 2012 with the radical idea that anyone, anywhere, should be able to easily and securely send and receive Bitcoin. Coinbase offers a trusted and easy-to-use platform for accessing the broader cryptoeconomy.

The Tender Offer will expire at 11:59 p.m., New York City time, on September 1, 2023, and may be extended at the company’s discretion. Holders of the Notes who validly tender and do not withdraw their Notes by 5:00 p.m., New York City time, on August 18, 2023, will be eligible to receive $645.00 per $1,000 principal amount of Notes.

This amount includes the Tender Consideration of $615.00 plus an Early Tender Premium of $30.00 per $1,000 principal amount of Notes. Holders who tender their Notes after the Early Tender Time but before the Expiration Time will be eligible to receive the Tender Consideration of $615.00 per $1,000 principal amount of Notes. Tendered Notes may be withdrawn at any time on or prior to the Early Tender Time.

The amount of Notes that may be purchased is subject to a maximum purchase price of $150.0 million, and tendered Notes may be subject to proration if the aggregate purchase price exceeds this amount. The company reserves the right to increase or decrease the Maximum Tender Amount.

Early settlement for Notes tendered at or prior to the Early Tender Time is expected to occur on the second business day following the Early Tender Time, unless terminated. Final settlement for Notes tendered after the Early Tender Time but before the Expiration Time is expected to occur on the second business day following the Expiration Time.

The consummation of the Tender Offer is subject to customary conditions, and the company reserves the right to waive any conditions, delay acceptance, or terminate the Tender Offer at its discretion. Full details of the terms and conditions are included in the company’s offer to purchase, dated August 7, 2023.

Documents related to the Tender Offer can be obtained from Global Bondholder Services Corp., the Tender and Information Agent, at GBSC’s website, or by telephone. Citigroup Global Markets Inc. has been engaged to serve as Dealer Manager for the Tender Offer.

Coinbase Completes Tender Offer for 3.625% Senior Notes Due 2031

Coinbase Global, Inc. has announced the conclusion of its cash tender offer for its 3.625% Senior Notes due 2031. The offer, which aimed to purchase up to $180.0 million of the notes, excluding accrued and unpaid interest, expired at 11:59 p.m., New York City time, on September 18, 2023.

Coinbase, established in 2012, has been at the forefront of building the cryptoeconomy, aiming to create a more transparent, efficient, and accessible financial system through cryptocurrency.

The company has stated its intention to finalize payments for all validly tendered notes by September 20, 2023. This follows the conditions outlined in Coinbase’s offer to purchase, dated August 7, 2023.

By 5:00 p.m., New York City time, on August 18, 2023, holders had tendered $50,034,000 of the notes. On August 22, 2023, Coinbase accepted this amount for purchase. By the Interim Expiration Time on September 1, 2023, an additional $211,062,000 of the notes were tendered. Consequently, on September 6, 2023, Coinbase accepted this aggregate principal amount.

Data from the Global Bondholder Services Corporation, the tender and information agent for the offer, indicates that an additional $1,447,000 of the notes were tendered by the Final Expiration Time. This brings the total tendered amount in the offer to $262,543,000. Holders who tendered their notes by the Final Expiration Time are set to receive $675.00 per $1,000 principal amount of notes accepted.

A breakdown of the tender offer is as follows:

Issuer
Coinbase Global, Inc.

Title of Security
3.625% Senior Notes Due 2031

CUSIP Number/ ISIN
44A CUSIP/ISIN: 19260Q AD9 / US19260QAD97; Regulation S CUSIP/ISIN: U19328 AB6 / USU19328AB62

Aggregate Principal Amount Outstanding
$1,000,000,000

Aggregate Principal Amount Tendered after Interim Expiration Time
$1,447,000

Aggregate Principal Amount Expected to be Accepted for Purchase on Final Settlement Date
$1,447,000

Aggregate Amount to be Paid
$1,001,349

Total Consideration
$675.00

Citigroup Global Markets Inc. acted as the Dealer Manager for the Tender Offer. Further details and documents related to the Tender Offer can be accessed at the Tender and Information Agent’s website.