Coinbase intends to conduct a private debt offering of $1.5 billion
According to a blog post, the largest crypto exchange in the United States, Coinbase plans to conduct a debt offering worth $1.5 billion in senior notes due 2028 and 2031.
Coinbase announces $1.5 billion private debt offering
“Coinbase intends to use the net proceeds from the offering for general corporate purposes, which may include continued investments in product development, as well as potential investments in or acquisitions of other companies, products, or technologies that Coinbase may identify in the future” the blog post stated.
Coinbase is looking to use the funds raised to further develop the company’s balance sheet for general corporate purposes and potential investments and acquisitions of companies, products, or technology. Closing of the offering is subject to market and other conditions.
As such, the new raise specifically aims to provide a total of $1.5 billion in principal of the company’s premium notes due 2028 and 2031, which will be fully guaranteed by Coinbase, Inc., a wholly-owned subsidiary of Coinbase, acts as its parent company. Interest rates, redemption terms, and other price increases are subject to negotiation between the company and the original buyers.
According to Coinbase, the notes and the related guarantee will only be offered and sold through a private offering memorandum to persons believed to be qualified institutional buyers under local securities laws as well as outside the United States.
“Neither the notes nor the related guarantee have been or will be, registered under the Securities Act or the securities laws of any other jurisdiction, and unless so registered, may not be offered or sold in the United States, except according to an applicable exemption from such registration requirements,” Coinbase added.
This news comes out of the background; as AZCoin News reported, the U.S. Securities and Exchange Commission (SEC) threatened to sue the exchange over a lending feature.
Coinbase intended to launch a yield product, which was supposed to go live in a few weeks. Its users would be able to earn interest on selected digital assets. From the get-go, the offering would only include USD Coin (USDC). After reaching out to the SEC, the company learned that the product would be classified as an unregistered security. Armstrong claims that the regulator didn’t explain how it made such a determination.
In light of this, many argue that Coinbase should be on the same side as Ripple for its protracted struggle with the SEC.
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