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MARA Holdings Announces Offering of Convertible Senior Notes
Proceeds to be used primarily to acquire bitcoin and repurchase existing convertible notes due 2026
Fort Lauderdale, FL, Nov. 18, 2024 (GLOBE NEWSWIRE) — MARA Holdings, Inc. (NASDAQ: MARA) has recently disclosed the pricing of an offering amounting to $850 million in aggregate principal of 0.00% convertible senior notes, set to mature in 2030. This private offering is being conducted in alignment with Rule 144A under the Securities Act of 1933, aiming specifically at qualified institutional buyers. Additionally, an option has been permitted for the initial purchasers to buy up to an extra $150 million in notes over a period of 13 days following the initial issuance date. The closing of this offering is projected for November 20, 2024, contingent on customary closing conditions being met.
These notes represent unsecured senior obligations of MARA and will not accrue regular interest. They are scheduled to mature on March 1, 2030, unless earlier repurchased, redeemed, or converted according to their specific terms. From March 5, 2028, and afterward, MARA may redeem the notes at a price equal to their principal amount plus any accrued interest under certain conditions, notably if the company’s stock price meets a specified threshold over a consecutive trading period.
Investors holding the notes hold the right to request a cash repurchase on December 1, 2027, or upon specified corporate changes, at a price equating to the full principal amount plus accrued interest. Notably, should a corporate event necessitate it, MARA may be required to enhance the conversion rate for those who choose to convert their notes under these conditions.
The convertible notes may be transformed into cash, shares of MARA’s common stock, or a mix of both at the discretion of MARA. Before December 1, 2029, conversion will solely be permitted under certain conditions, shifting to a more flexible structure leading up to the maturity date.
The initial conversion rate is set at 38.5902 shares per $1,000 principal of notes, translating to a conversion price of approximately $25.9133 per share. This conversion price reflects a premium of around 42.5% relative to the recent trading performance of MARA’s stock.
MARA anticipates net proceeds to reach approximately $833 million from this offering, which may rise to about $980 million should the additional notes option be exercised fully. These proceeds are primarily earmarked for repurchasing its existing convertible notes due in 2026 and acquiring additional bitcoin, alongside being allocated for general corporate needs such as working capital and strategic growth efforts.
In relation to the repurchase of the 2026 notes, MARA expects significant market activity from holders who may unwind their hedging strategies, potentially impacting the price of MARA’s common stock during this transition. This creates considerations for both the market’s behavior and the overall pricing dynamics of the convertible notes.
This offering remains confined to qualified institutional buyers, and the respective notes and shares associated with them have not been registered under the Securities Act. Consequently, they may be offered or sold only under specific exemptions.
This announcement does not constitute a solicitation to purchase the notes, and compliance with legal frameworks is imperative in any such engagement.
About MARA
MARA Holdings, Inc. stands at the forefront of digital asset compute, striving to integrate innovative technology for a sustainable future by harnessing underutilized energy for economic gain.
Forward-Looking Statements
The statements in this report regarding future expectations and plans qualify as forward-looking statements under relevant securities legislation. Such assertions include estimates of offering proceeds, intended use of net proceeds, and anticipated closure timelines. Actual outcomes may vary substantially due to various factors, including market conditions and regulatory requirements. MARA disclaims any obligation to update these forward-looking statements unless mandated by law.
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