On May 17, crypto exchange Coinbase revealed its plan to boost $1.25 B by selling convertible bonds. The latter is a security offering that allows the purchaser to acquire shares or cash of common stock in the issuing company.
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In the case of Coinbase, the sale represents Convertible Senior Notes due 2026. They will be unsecured debts of the company that offer semi-annual interest pays till June 1, 2026, except earlier bought back or converted.
Coinbase will cooperate with institutional purchasers, following the Securities Act Rule 144A.
As announced by the firm, primary shoppers of the notes will get the possibility to acquire an extra $187.5 M principal sum of notes to compensate over-allotments. In other words, to support the share price after the offering without putting their capital at risk.
Other details such as interest percents, the initial conversion percents will be announced upon pricing of the offering.
The news came amid the bearish trends in crypto and Coinbase shares seeing a decline. On Monday the stock was trading at $248 at market close, the lowest price that is about 45% down from the $429 high that was at a time when the stock first started trading on April 14.