Marathon Digital plans to raise $700 million by issuing convertible senior notes due in 2030, as announced on November 18. This offering depends on market conditions. Initial buyers will have an option to purchase an additional $105 million within 13 days of the issuance.
The primary goal of this fundraising is to restructure Marathon’s near-term debt. The company intends to redeem $200 million of senior secured notes maturing in 2026. Furthermore, Marathon plans to use the funds for corporate growth, strategic investments, asset expansion, and debt repayment.
Terms of the Convertible Notes
The unsecured notes will mature on March 1, 2030. They will begin accruing semi-annual interest in March 2025. These notes will be privately sold to institutional buyers under Rule 144A, bypassing U.S. securities registration.
Investors can convert the notes into cash, Class A common stock, or a combination of both. Starting in March 2028, Marathon can redeem the notes for cash under specific conditions.
Stock Impact and Market Activity
Marathon expects holders of existing 2026 convertible notes to unwind their equity hedges. This could involve trading Marathon’s stock or adjusting derivatives. As a result, demand for its stock may rise temporarily. This could increase the stock price and the effective conversion rate for the new notes.
However, news of the offering has already affected the company’s stock price. Marathon’s stock dropped by more than 6% in pre-market trading, according to Google Finance data.
Recent Fundraising Efforts
This $700 million offering is Marathon’s second major convertible notes issuance this year. In August, the company raised $250 million in notes maturing in 2031. Additionally, in October, Marathon secured a $200 million Bitcoin-backed credit line. This was done to support strategic opportunities and corporate growth.
Marathon’s Role in Bitcoin Mining
Marathon Digital holds over 27,500 BTC, worth approximately $2.5 billion, according to Bitcoin Treasuries data. The company remains a major player in Bitcoin mining. This new funding effort highlights its ongoing push to strengthen its financial position and expand its industry presence.
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