MicroStrategy is planning to offer $500 million worth of convertible senior notes, with proceeds aimed at purchasing additional Bitcoin (BTC), the company announced recently. These notes will mature in 2032.

On Thursday, MicroStrategy detailed plans to offer qualified institutional buyers the chance to purchase unsecured convertible senior notes due in 2032. The private offering will be subject to market conditions and other factors. The notes will bear interest payable semi-annually, on June 15 and December 15, until they mature on June 15, 2032, unless repurchased, redeemed, or converted according to the offering’s terms.

MicroStrategy may, under certain conditions, redeem all or part of the notes for cash. The company noted,

“Holders of the notes will have the right to require MicroStrategy to repurchase for cash all or any portion of their notes on June 15, 2029.”

According to the announcement, these notes are convertible into cash, shares of the company’s class A common stock, or a combination of both. The reference price for the initial conversion will be the composite volume-weighted average of MicroStrategy’s stock from 9:30 am through 4:00 pm EDT on the pricing date.

If the sale proceeds, MicroStrategy will use the net proceeds to purchase more Bitcoin, adding to the 214,400 BTC the company held as of April 30, 2024. Additionally, the funds will be used for other corporate purposes.

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