Coinbase announces debt offering in an attempt to raise $1.5 billion
By Bob Garcia
Recent attacks from regulators may have the cryptocurrency exchange nervous
According to an announcement shared yesterday, the largest cryptocurrency exchange in the US, Coinbase, is planning to conduct a debt offering in order to raise a total of $1.5 billion. As explained by the Nasdaq-listed cryptocurrency exchange, the capital raised will be earmarked toward growing the company’s balance sheet for general corporate purposes, as well as various acquisitions and investments in other companies, technology, or products. The firm made it clear that the closing of the offering is subject to market and other conditions.
This new raise is clearly intended to offer an aggregate principal amount of $1.5 million of the company’s senior notes due 2028 and 2031. Coinbase Inc., a wholly-owned subsidiary of Coinbase acting as its holding company, will be in charge of underwriting all of this. The various repayment provisions, interest rate and other terms of the raise are subject to negotiations between the company and those who become the initial purchasers.
In addition, to be eligible to purchase a note and the related guarantee, Coinbase said it has to involve a private offering memorandum to persons “reasonably believed to be qualified institutional buyers” under securities laws both inside and outside the US. “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 pursuant to an applicable exemption from such registration requirements,” Coinbase added.
This news comes shortly after the company was threatened with a lawsuit by the US Securities and Exchange Commission (SEC) should it decide to launch a crypto lending program. Coinbase today is considered one of the largest cryptocurrency exchanges in the world, especially for being able to facilitate more than $5.6 billion in daily trading volume.