Coinbase Global Inc., a prominent player in the cryptocurrency exchange realm, has unveiled plans to repurchase a portion of its outstanding junk bonds, coinciding with the notable surge in cryptocurrency values. As the world’s largest cryptocurrency, Bitcoin, nears its peak value for the year, Coinbase’s move to buy back its debt reflects its strategic financial decisions.
The crypto exchange’s buyback offer encompasses up to $150 million of its 3.625% notes due October 2031. Investors willing to participate in the redemption will have the opportunity to receive a sum between $615 and $645 for every $1,000 of principal, as outlined in the official statement. The offer is scheduled to conclude on September 1st at 11:59 p.m. New York time.
The value of Bitcoin stood at $29,204 as of 5:34 p.m. New York time on Monday. The digital token reached its highest point of the year in July at $31,386. Simultaneously, the debt that Coinbase intends to retire witnessed a market trade at 62 cents on the dollar as the bond market concluded for the day. This value marked an improvement from the record low of 52 cents established in November.
Coinbase has enlisted the services of Citigroup Global Markets Inc. to oversee and manage the tender offer process.
This maneuver aligns with a broader trend observed among corporate borrowers, who are capitalizing on the current environment to repurchase debt. Rising interest rates have led to higher refinancing costs, prompting companies to strategically retire debt obligations. Notable instances include Warner Bros Discovery Inc.’s announcement of a potential $2.7 billion bond repurchase, targeting bonds maturing between December 2023 and June 2024. Additionally, Verizon Communications Inc. launched a $1.5 billion bond buyback in July, aiming to mitigate its debt burden by targeting debt maturing between 2024 and 2036.
