Coinbase to Raise $2 Billion Through Convertible Senior Notes in 2029 and 2032

Coinbase Global, Inc. (Nasdaq: COIN) has announced a proposed private offering of $2 billion in convertible senior notes, with $1 billion maturing on October 1, 2029, and another $1 billion due on October 1, 2032 [1]. The offering, conducted under Rule 144A of the Securities Act, is targeted at qualified institutional buyers. The company has also granted the initial purchasers options to buy an additional $150 million of both 2029 and 2032 notes, providing further flexibility [1]. These senior, unsecured obligations will pay interest semi-annually and are expected to enhance the firm’s balance sheet flexibility.

Coinbase plans to implement capped call transactions with the initial purchasers or their affiliates to limit the dilution effect on existing shareholders should the notes be converted [1]. These hedging activities could influence the market price of the company’s shares. A portion of the net proceeds will be used to cover the cost of these capped calls, and if the additional purchase options are exercised, they will also fund extra capped call coverage. The remaining funds will support general corporate purposes, including working capital, capital expenditures, potential acquisitions, and share repurchases [1].

The move reflects Coinbase’s strategic focus on securing flexible financing while managing shareholder dilution and addressing the volatility in the crypto sector. The company has previously issued convertible notes with varying interest rates across different maturity dates, indicating a consistent capital management approach [1]. The offering is not registered under the Securities Act and will not be publicly available in the United States without an applicable exemption [1].

Market reactions have been mixed, with no public statements from Coinbase CEO Brian Armstrong or other leadership figures. Analysts suggest that the offering could improve Coinbase’s capital structure and reduce counterparty risks, potentially benefiting institutional clients [1]. However, the effectiveness of the strategy will depend on market conditions and regulatory developments. The offering remains subject to regulatory approval and may be adjusted based on prevailing market dynamics [1].

Source: [1] Coinbase Announces Proposed Private Offering of $2.0 Billion of Convertible Senior Notes (https://www.stocktitan.net/news/COIN/coinbase-announces-proposed-private-offering-of-2-0-billion-of-2f3fh1p6pe06.html)