Strategy Plans Early Redemption of $1.5 Billion in Convertible Notes Due 2029
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Strategy, the largest corporate holder of Bitcoin, plans to redeem about $1.5 billion of convertible notes due in 2029 ahead of maturity.
Cointelegraph reported on May 16 that the company disclosed in a filing with the US Securities and Exchange Commission that it had privately negotiated with some holders of its 0% convertible notes and agreed to repurchase about $1.38 billion of the debt.
The transaction is scheduled to close next Tuesday, though the final redemption amount could change depending on market conditions.
Strategy said it plans to fund the repayment with cash on hand, proceeds from its at-the-market equity offering program, or proceeds from Bitcoin sales.
The move is part of the company's broader debt restructuring strategy.
Chairman Michael Saylor said in May that the company could sell some Bitcoin to fund dividend payments. In February, he also outlined a plan to gradually shift the company's debt structure toward equity-based financing over the next several years.
Strategy is pursuing a plan to gradually convert convertible debt into equity over the next three to six years. The approach could help ease debt pressure, though it may also dilute existing shareholders.
The company's total debt stands at about $8.2 billion.
Strategy has recently been raising funds for Bitcoin purchases through STRC, its floating-rate perpetual preferred stock. STRC recently posted a record $1.5 billion in daily trading volume.
The company also bought 535 Bitcoin for $43 million on May 11. It now holds 818,869 Bitcoin, worth about $64 billion at current market prices.
