Marathon Digital Holdings, Inc. has announced a proposed private offering of $250 million in convertible senior notes, with the proceeds primarily aimed at acquiring bitcoin and supporting general corporate purposes.
Last month, CryptoSlate reported the company’s intention to explore such an offering after Marathon CEO Peter Thiel commented that it would purchase Bitcoin when “conditions suggest it’s the right thing to do from a shareholder perspective.”
The offering, subject to market conditions, targets qualified institutional buyers under Rule 144A of the Securities Act of 1933. Additionally, Marathon may grant initial purchasers an option to acquire up to an additional $37.5 million in notes within a specified period after issuance, according to a press release from the company.
The notes, maturing on September 1, 2031, will be unsecured senior obligations of Marathon, bearing interest payable semi-annually starting March 1, 2025. Conversion options allow holders to convert the notes into cash, shares of Marathon’s common stock, or a combination at the company’s discretion. Redemption of the notes is possible on or after September 6, 2028, under certain conditions, with a requirement that at least $75 million of the notes remain outstanding if only a portion is redeemed. Holders also have the right to demand repurchase for cash on March 1, 2029.
Marathon intends to use the net proceeds from the offering to acquire additional bitcoin and for general corporate purposes, which may encompass working capital, strategic acquisitions, asset expansion, and debt repayment. The notes will not be registered under the Securities Act or any other jurisdiction’s securities laws and may only be offered or sold in the United States under registration or an applicable exemption.
The issuance of convertible bonds has seen a resurgence in 2024, driven by rising interest rates and increased corporate activity. Convertible bonds offer a hybrid investment option, combining fixed-income stability with potential equity-like returns, making them attractive in the current economic environment. Global issuance of convertible bonds continues to grow, with significant activity in the US market. Marathon’s offering aligns with this trend, allowing investors to engage in a versatile and complex financial instrument.
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