MicroStrategy Announces Pricing Of Convertible Senior Notes Of $525 Mln

(RTTNews) - MicroStrategy Inc. (MSTR) on Friday announced the pricing of convertible senior notes of $525 million, an increase from the initial $500 million proposed, due in 2031. The offering is expected to close on March 18, 2024.

MSTR granted initial purchasers an option to buy up to an additional $78.75 million aggregate principal amount within 13 days starting from the issuance date.

The notes, which will be unsecured senior obligations of MSTR, will accrue interest at a rate of 0.875 percent per annum, paid semi-annually on March 15 and September 15 of each year starting September 15, 2024.

The maturity date for the notes is March 15, 2031, with provisions for early redemption or conversion according to their terms.

From March 22, 2028, MicroStrategy may redeem all or part of the notes at a redemption price of 100 percent of the principal amount, plus accrued interest, under specific conditions.

The initial conversion rate is 0.4297 shares per $1,000 principal amount, with an initial conversion price of approximately $2,327.21 per share, representing a 40 percent premium over the volume-weighted average price of MicroStrategy's stock on March 14, 2024.

MSTR anticipates net proceeds of about $515 million from the offering, or $592.3 million if the option to purchase additional notes is fully exercised. The company intends to allocate the funds towards acquiring more bitcoin and for general corporate purposes.