Cryptocurrency exchange Coinbase has reached an agreement to redeem $64.5 million of 0.50% convertible senior notes due 2026, according to a June 15 announcement. However, the company estimates it only needs $45.5 million in cash to complete te te the deal, given the 29% discount to the face value of the notes. Biji wrote:
"The repurchase is expected to close on or about June 20, 2023, subject to the satisfaction of customary closing conditions. Following such closing, approximately $1.373 billion of the principal amount of the notes remains outstanding." Coinbase Chief F inancial Officer Alesia Haas described the transaction as an "opportunistic buyback" and said the company will continue to look for such opportunities in the future. Many of Coinbase's debt instruments have been trading at a discount since the cryptocurrency bear market began.
Investor concerns were heightened by a disclosure in May 2022 that users' digital assets held on the platform could be "entered into bankruptcy proceedings" and could be considered "unsecured creditors" if the company goes bankrupt .
For example, the September 2021 issue of Coinbase Global Inc. DL-Notes 2021 (21/31) is currently trading at 54 cents. A bond offering of over $1 billion with a coupon rate of 3.625% and a maturity date of October 2023. The bond's current yield is 15.2%. However, investors don't appear to be enticed by the discount. On June 6, the SEC charged Coinbase with operating an unregistered securities exchange and selling unregistered securities from its staking-as-a-service prog ram . Litigation is ongoing.
