Coinbase Global (NASDAQ:COIN) saw its stock dip 1% Tuesday morning after the cryptocurrency exchange announced a $2 billion offering of convertible senior notes targeted at qualified institutional buyers.
The offering consists of $1 billion in notes maturing in 2029 and another $1 billion due in 2032. Additionally, initial purchasers have the option to buy up to $150 million more of each series. These notes will be senior, unsecured obligations, with interest payable semi-annually. They can be converted at Coinbase’s discretion into cash, Class A common stock, or a combination of both.
To mitigate potential dilution from the note conversions, Coinbase plans to enter into capped call transactions, partially funded by proceeds from the offering. The remainder of the proceeds will support general corporate needs, including working capital, capital expenditures, investments, acquisitions, and potential debt repurchases.
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