Cryptocurrency exchange Coinbase is planning to raise $1 billion through senior convertible notes to generate funds for debt repayment and general corporate purposes.

Senior convertible notes, a type of debt security that can be converted into equity, will be privately offered to institutional buyers and must be repaid by April 1, 2030. The move comes as Coinbase’s share price hits a two-year high, indicating investor confidence in the company.

The decision to offer $1 billion in senior convertible notes was disclosed in an 8-K filing with the United States Securities and Exchange Commission. These notes take precedence over common stock in the event of bankruptcy or liquidation and can be converted into cash, Coinbase shares, or a combination of both.

The funds raised will be used to repay existing convertible senior notes due in 2026, 2028, and 2031, as well as for general corporate purposes, working capital, capital expenditures, and capped call transactions.

In a similar move, MicroStrategy recently completed an $800 million convertible note offering to acquire additional Bitcoin for its treasury reserve. Coinbase’s stock price remained stable on March 12, closing at $256, but dropped in after-hours trading following the announcement of the note offering.

Despite this, Coinbase’s stock is up over 63% year-to-date, reflecting the overall rally in the cryptocurrency market. As the market continues to perform well, Coinbase remains a key player in the digital asset space.

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