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Coinbase Global to Issue $2 Billion Convertible Senior Notes

Coinbase's official announcement reveals plans to issue $2B in convertible senior unsecured bonds maturing in 2029 and 2032, including options totaling $300M, amid a 26% Q2 revenue decline.

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Summary

In an official press release on August 5, Coinbase announced its plan to privately issue $2B in convertible senior unsecured bonds under SEC Rule 144A, split into two series maturing in 2029 and 2032. Each series features an additional $150M purchase option, totaling $300M, with bonds convertible every six months into cash, Class A common stock, or a combination. The funds will be allocated to capped call transactions, working capital, capital expenditures, acquisitions, and repurchases. This issuance follows a similar offering in 2021 and comes as Coinbase reported a 26% decline in Q2 revenue alongside an increase in Bitcoin holdings.

Terms & Concepts
  • convertible senior notes: Debt securities that can be converted into cash, stock, or a combination based on predetermined terms, helping companies raise capital while offering conversion benefits.
  • capped call transactions: Financial strategies designed to limit dilution by capping the potential benefits from converting convertible securities, mitigating the impact of share issuance.
  • SEC Rule 144A: A regulation that permits the sale of securities to qualified institutional buyers without full SEC registration, streamlining the capital-raising process.