Coinbase plans for a bond offering to raise $1.5 billion

Coinbase announced a bond sale after threats from the US SEC
  • Coinbase officially announced that it is planning to offer debts worth $1.5 billion
  • The funds will help the firm to further grow its balance sheet for general corporate purposes
  • The latest fund aims to offer a $1.5 billion aggregate principal amount of the firm’s senior notes due 2028 and 2031
  • Coinbase revealed that the notes and related guarantees would only be provided and sold using a private offering memorandum to the buyers

Coinbase is one of the prominent crypto exchanges globally. The exchange is one of the first crypto start-ups that went public this year. Recently, the United States Securities and Exchange Commission (SEC) had threatened the exchange over its lending program. However, on Monday, the world’s one of largest crypto exchanges officially announced that it is planning to offer debts worth $1.5 billion. Notably, the crypto assets exchange is looking to further grow its balance sheet for general corporate purposes.

Why is Coinbase planning to raise funds?

Coinbase plans to raise $1.5 billion by offering bonds. According to the official announcement, the funds will help the firm to further grow its balance sheet for general corporate purposes. Moreover, the funds will similarly enable potential investments and acquisitions of other firms, products, or technology. According to Coinbase, the closing of the debt offering is subject to market and other conditions. 

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Specifically, the latest fund aims to offer a $1.5 billion aggregate principal amount of the firm’s senior notes due 2028 and 2031. Indeed the bonds will be fully pledged by Coinbase Incorporation, a wholly-owned subsidiary functioning as its gripping firm. Furthermore, the interest rate, redemption provisions, and other terms of the fundraising are subject to negotiations with the initial buyers.

Bonds will be sold using a private offering memorandum

In the official announcement, Coinbase revealed that the notes and related guarantees would only be provided and sold using a private offering memorandum to the buyers. Notably, it will be offered to reasonably believed qualified institutional buyers under the local securities laws.

According to Coinbase, the bonds, and related guarantees have been or will be registered under the Securities Act of any other jurisdiction. If not registered, the bonds may not be offered or sold in the United States. However, under an applicable exemption from such registration requirements, the notes can be offered or sold.

Threats for lending cryptocurrency

The news of debt offering comes amid Coinbase getting a hit from the US financial regulator. The US SEC jeopardized to sue the firm over its upcoming cryptocurrency lending program. However, following the strike from the financial regulator, Brian Armstrong, the CEO of the crypto exchange noted that there are several other crypto firms available in the market offering some similar services.

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