MARA Holdings Announces $850 Million Offering of Convertible Senior Notes Due 2030

MARA Holdings Inc. (NASDAQ: MARA), a prominent player in the digital asset space, has announced the pricing of its offering of $850 million aggregate principal amount of zero-coupon convertible senior notes due 2030. According to MARA Holdings, the notes are set to be sold in a private offering to qualified institutional buyers under Rule 144A of the Securities Act of 1933.

Details of the Note Offering

The convertible senior notes, which will not bear regular interest, mature on March 1, 2030. MARA Holdings has provided initial purchasers with an option to buy up to an additional $150 million in principal amount of the notes. The offering is anticipated to close on November 20, 2024, pending customary closing conditions.

The notes are unsecured and senior obligations of the company, convertible into cash, MARA common stock, or a combination of both. The initial conversion rate is set at 38.5902 shares per $1,000 of principal, translating to a conversion price of approximately $25.9133 per share, a 42.5% premium over the recent average price of MARA’s stock.

Use of Proceeds

Net proceeds from the offering are estimated at approximately $833 million, after accounting for discounts and commissions. MARA plans to allocate roughly $199 million to repurchase $212 million of its existing convertible notes due 2026. The remaining funds are earmarked for acquiring additional bitcoin and other corporate purposes, such as strategic acquisitions and debt repayment.

Market Impact and Strategic Moves

In the context of this financial maneuver, MARA anticipates that holders of the existing notes, who have hedged their equity price risk, may unwind their positions, potentially impacting the market price of MARA’s stock. This activity could influence the effective conversion price of the new notes.

The issuance of these notes aligns with MARA’s broader strategy to leverage digital assets and support energy transformation, reinforcing its standing in the blockchain and clean energy sectors.

Disclaimer and Forward-Looking Statements

MARA Holdings has clarified that the notes are being offered without registration under the Securities Act and are subject to certain conditions and risks, as detailed in the company’s filings with the SEC. The company has also issued forward-looking statements regarding the expected outcomes of this offering, with a disclaimer about the inherent risks and uncertainties involved.

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