Coinbase plans to raise $1.5B via debt offering. The bitcoin exchange Coinbase will conduct a private placement of two issues of bonds with a pre-emptive right of redemption in 2028 and 2031. Thus, the total nominal value is $1.5 billion.
The funds will be used for general corporate purposes. They will also include product development and potential participation in mergers and acquisitions (M&A) transactions.
Qualified institutional investors from the United States will be able to purchase the securities. In accordance with Rule 144A of the Securities Act. As well as non-residents, according to Regulation S of the said document.
The parameters of the issue
The bonds will receive a guarantee from Coinbase Inc, a subsidiary of the cryptocurrency exchange.
Negotiations with potential investors will determine the issue’s parameters. Moreover, the closing of the transaction depends on the market conditions.
Recall that in May, Coinbase announced a private placement of convertible bonds worth $1.25 billion with a maturity date in 2026. Qualified institutional investors have become buyers of debt obligations. The exchange provided the first of them with the opportunity to purchase securities worth $187.5 million within 30 days.
Disagreements with SEC
In April, Brian Armstrong, CEO of the exchange, predicted that the company’s non-trading business would grow significantly in the long term due to investments in new areas. According to Armstrong, over time, the platform intends to provide users with tools that will allow them to make “more informed decisions” regarding coins.
Later, in September, top management disclosed information about disagreements with the U.S. Securities and Exchange Commission (SEC) regarding the announced crypto-savings accounts based on the USD Coin (USDC) stablecoin. In other words, SEC has warned Coinbase about prosecution in the case of launching crypto-savings accounts based on USDC at 4% per annum due to their interpretation as “securities”.