FX.co ★ MicroStrategy Announces Pricing Of Convertible Senior Notes Of $525 Mln

MicroStrategy Inc. increased their pricing for convertible senior notes from the initial $500 million to $525 million, which will mature in 2031. The offer is set to close on March 18, 2024.

The company also gave initial purchasers the opportunity to purchase an additional amount of up to $78.75 million within the first 13 days from the issuance date. These notes, which will serve as unsecured senior obligations of MicroStrategy, will accumulate an interest of 0.875 percent per annum and be paid out semi-annually every March 15 and September 15, starting from September 15, 2024.

The notes will mature on March 15, 2031, with the eligibility for early redemption or conversion based on the terms set out. From March 22, 2028, MicroStrategy has the right to redeem all or part of the notes at a redemption price of 100 percent of the principal amount plus accrued interest, under certain conditions.

The initial conversion rate is set at 0.4297 shares per $1,000 principal amount, with an initial conversion price estimated at about $2,327.21 per share. This represents a 40 percent premium over the volume-weighted average price of MicroStrategy's stock on March 14, 2024.

The company is expecting to generate approximately $515 million in net proceeds from this offer, or up to $592.3 million if the option to purchase additional notes is fully utilized. They intend to use the funds primarily to purchase more bitcoin and for other general company needs.