TLDR
- MARA Holdings plans to raise up to $1 billion through zero-interest convertible notes due 2032
- Initial offering of $850 million with option for additional $150 million
- Up to $50 million will repurchase existing debt due 2026
- Remaining funds target Bitcoin acquisitions and general corporate purposes
- MARA currently holds 50,000 BTC, ranking as second-largest corporate Bitcoin holder
MARA Holdings stock dropped 4.5% after announcing plans for a massive debt offering to fuel its Bitcoin accumulation strategy. The digital energy company revealed it will offer $850 million in zero coupon convertible senior notes due 2032.
The company plans to grant initial purchasers an option to buy up to $150 million in additional notes within 13 days of issuance. This could push the total offering to $1 billion if fully exercised.
MARA will offer the notes to qualified institutional buyers under Rule 144A of the Securities Act. The notes represent unsecured senior obligations that won’t bear regular interest.
The zero-coupon structure means investors won’t receive regular interest payments. Instead, returns come primarily through potential conversion to equity or appreciation over time.
MARA intends to use up to $50 million of proceeds to repurchase existing 1.00% convertible senior notes due 2026. This move will help clean up the company’s debt structure.
The remaining funds will support Bitcoin acquisitions, capped call transactions, and general corporate purposes. The company’s treasury strategy continues its focus on cryptocurrency accumulation.
Bitcoin Treasury Expansion
MARA currently holds 50,000 BTC in its corporate treasury. This positions the company as the second-largest corporate Bitcoin holder after MicroStrategy’s 607,000 BTC.
The announcement follows MARA’s recent completion of a minority acquisition of Two Prime. Two Prime manages $1.75 billion in assets as an institutional investment adviser.
MARA’s Bitcoin mining revenue hit new records in May. Annualized mining revenue exceeded $752 million during that period.
The company increased BTC production by 35% in May despite rising mining difficulty. Strong output continued as network hashrate kept climbing.
Debt Structure Details
The convertible notes will mature on August 1, 2032, unless earlier repurchased, redeemed, or converted. This eight-year timeline aligns with MARA’s long-term Bitcoin strategy.
Notes will be convertible into cash, MARA stock, or a combination of both at the company’s election. Conversion rates and specific terms will be determined at pricing.
MARA plans to enter privately negotiated capped call transactions to reduce potential dilution from note conversions. These transactions may involve counterparties purchasing MARA shares or entering derivative deals.
The company expects to use the U.S. composite volume weighted average price from 2:00 p.m. through 4:00 p.m. Eastern on the pricing date. This will serve as the reference price for calculating initial conversion rates.
The offering remains subject to market and other conditions. No guarantee exists that the deal will close or on what specific terms.
MARA previously announced plans to sell up to $2 billion in stock for Bitcoin purchases. The company filed with regulators for the ability to issue shares “from time to time” through major institutional investors.
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