Coinbase increased its bond buyback limit to $180 million and extended its deadline to Sept. 18, according to a Sept. 5 statement.
Coinbase extended its deadline due to unexpectedly high interest in its buyback program. The exchange initially proposed repurchasing its 3.625% senior notes, maturing in 2031, at $675 per $1,000 principal amount of tendered notes.
At the early tender stage, bondholders tendered approximately $50 million worth of notes, driven by an initial offering price of 64.5 cents on the dollar. Following an increase to 67.5 cents on the dollar and an extension of the interim expiration period, an additional $211.06 million worth of notes were tendered, raising the total buyback value to $261 million.
With the expanded maximum aggregate purchase price, Coinbase can acquire all the offered bonds and potentially more. This surge in bondholder interest implies that many market participants may view the current purchase price as fair and see limited upside in holding until maturity.
Bonds issued in 2021
Coinbase issued these bonds for $1 billion in 2021 during the bullish phase of the cryptocurrency market. Since then, several crypto projects, such as FTX, BlockFi, Celsius, and others, have faced insolvency, with financial regulators increasing their regulatory pressure on the emerging industry. The U.S. Securities and Exchange Commission filed lawsuits against Coinbase, alleging that the firm violated federal securities law.
Nevertheless, the bond’s value has risen from its low of 47 cents on the dollar in December 2022 to its current purchase price. Despite these regulatory hurdles and bearish sentiments pervading the market, Coinbase’s stock has also experienced a 118% year-to-date increase.
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