Coinbase Announces $1.25bn Private Debt Offering

U.S.-based crypto exchange company Coinbase announced Monday that it plans to conduct a $1.25 billion private debt offering.

The Nasdaq-listed company made the announcement via a press release on its website, stating that they are proposing a private offering of $1.25 billion in convertible notes. These notes will reach their due in 2026.

The offer is being opened to persons agreed upon as ‘qualified institutional buyers’ (in this case,  institutional investors who manage a minimum of $100 million in securities issued by other companies). This is in relation to Rule 144A stated under the Securities Act of 1933.

Coinbase also expects to grant the initial purchasers of the notes a 30-day option to purchase up to an additional $187.5 million principal amount of notes solely to cover over-allotments. 

The notes will be senior, unsecured obligations of Coinbase will accrue interest payable semi-annually in arrears, and will mature on June 1, 2026, unless earlier repurchased, redeemed, or converted.

A senior convertible note is a kind of debt security that contains an option in which the note will be converted into a predefined amount of the issuer's shares. This kind has priority over all other debt securities issued by the same organization.

Coinbase's private debt offering announcement is coming about one month after it was listed on NASDAQ — an event that drove several cryptocurrencies rallying to new record highs.