Coinbase increases its junk bond supply following increased demand
U.S. cryptocurrency exchange giant Coinbase increased the sale of its junk-bond offering to $ 2 billion, which was an indication of increased investor demand.
Investors Respond to Portobello to Coinbase’s Junk Bond Offer
Coinbase first announcement plans to raise $ 1.5 billion in senior notes from investors in a private offering on Monday, September 13, 2021.
However, Bloomberg reported Tuesday that an anonymous revealed that the company had increased sales to $ 2 billion, after witnessing an increase in orders.
According to the publication, there were $ 7 billion in investor orders, which prompted the company to expand its offering. There would have been equal amounts of seven-year bonds maturing in 2028 and 10-year bonds maturing in 2031 were sold at interest rates of 3.375% and 3.625% respectively.
Meanwhile, sources familiar with the matter said the interest rates were lower than those initially offered by Coinbase. Commenting on the latest development, Bloomberg Intelligence analyst Julie Chariell said that “The strong demand is clearly a big endorsement by investors for debt.”
Coinbase said earlier that the bond offering serves to bolster its strong balance sheet. According to the company, the product will be used “for general business purposes, which may include continued investments in product development, as well as potential investments or acquisitions of other companies, products or technologies that Coinbase may identify. in the future”.
The cryptocurrency exchange joins large business intelligence firm MicroStrategy, as the second crypto-related firm to sell a bond offering. The company headed by Michael Saylor in June finished the sale $ 500 million in senior notes, with the funds being used to buy more bitcoin.
Coinbase made headlines in April, after the company went public via a direct listing on the Nasdaq, becoming the first crypto exchange to go public. Later in August, the company in partnership with the financial giant Mitsubishi UFJ Financial Group (MUFG) to expand into the Japanese market.
The crypto exchange has also stated that it will be buy $ 500 million worth of cryptocurrency, while allocating 10% of its profits to the purchase of various crypti assets. Coinbase CEO Brian Armstrong said the percentage could rise as the cryptocurrency economy continues to mature.
Meanwhile, Coinbase has revealed that the United States Securities and Exchange Commission (SEC) may prosecute the business if the business were to launch its planned loan program.
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