Coinbase raises $2 billion via convertible notes for growth and debt refinancing

Coinbase has announced a proposed $2 billion convertible note offering to support its growth, refinance existing debt, and improve liquidity. The offering includes two tranches: $1 billion in 2029 notes and $1 billion in 2032 notes. Investors will also have the option to purchase an additional $150 million in each tranche within 13 days of the initial offering[1]. These notes will be classified as senior, unsecured obligations, with interest paid semi-annually[1].

The convertible notes can be exchanged for cash, Class A common stock, or a combination of both, at Coinbase’s discretion. The specific interest rate, conversion rate, and other terms will be finalized when the offering is priced[1]. To mitigate the potential dilution of its Class A common stock upon conversion, Coinbase plans to enter into capped call transactions with initial purchasers or their affiliates. Part of the net proceeds will be used to fund these transactions[1].

The remaining net proceeds will be allocated for general corporate purposes, including working capital, capital expenditures, potential investments, acquisitions, and share repurchases of both Class A common stock and existing convertible or senior notes[1]. This move comes amid challenging market conditions for the crypto industry. Last week, Coinbase reported Q2 revenue of $1.5 billion, which fell below analyst expectations, largely due to a decline in spot crypto trading volumes[1].

The offering reflects Coinbase’s strategic shift toward strengthening its balance sheet and funding long-term growth. The decision to raise capital through convertible debt, rather than issuing equity, suggests a desire to minimize immediate shareholder dilution while retaining flexibility in capital deployment. However, the reliance on external financing also highlights the pressures facing crypto exchanges as market activity wanes and investor confidence fluctuates[1].

Source: [1] CoinBase proposes $2 billion convertible note offering to fund growth and acquisitions (https://cryptobriefing.com/coinbase-convertible-note-offering/)