Coinbase Announces Proposed Private Offering of $1.25 Billion of Convertible Senior Notes Due 2026
17 Mai 2021 - 10:00PM
Business Wire
Coinbase Global, Inc. (“Coinbase”) (Nasdaq: COIN) today
announced its intention to offer, subject to market conditions and
other factors, $1.25 billion aggregate principal amount of
Convertible Senior Notes due 2026 (the “notes”) in a private
offering (the “offering”) to persons reasonably believed to be
qualified institutional buyers pursuant to Rule 144A promulgated
under the Securities Act of 1933, as amended (the “Securities
Act”). Coinbase also expects to grant the initial purchasers of the
notes a 30-day option to purchase up to an additional $187.5
million principal amount of notes solely to cover over-allotments.
The notes will be senior, unsecured obligations of Coinbase, will
accrue interest payable semi-annually in arrears and will mature on
June 1, 2026, unless earlier repurchased, redeemed or converted.
The notes will be convertible into cash, shares of Coinbase’s Class
A common stock, or a combination thereof, at Coinbase’s election.
The interest rate, initial conversion rate, and other terms of the
notes are to be determined upon pricing of the offering.
In connection with the pricing of the notes, Coinbase expects to
enter into privately negotiated capped call transactions with one
or more of the initial purchasers and/or their respective
affiliates and/or other financial institutions (the “option
counterparties”). The capped call transactions will cover, subject
to anti-dilution adjustments substantially similar to those
applicable to the notes, the number of shares of Coinbase’s Class A
common stock underlying the notes sold in the offering. The capped
call transactions are generally expected to reduce potential
dilution to Coinbase’s Class A common stock upon any conversion of
the notes and/or offset any potential cash payments Coinbase is
required to make in excess of the principal amount of converted
notes, as the case may be, with such reduction and/or offset
subject to a cap.
Coinbase has been advised that, in connection with establishing
their initial hedges of the capped call transactions, the option
counterparties or their respective affiliates expect to purchase
shares of Coinbase’s Class A common stock and/or enter into various
derivative transactions with respect to the Class A common stock
concurrently with or shortly after the pricing of the notes. This
activity could increase (or reduce the size of any decrease in) the
market price of Coinbase’s Class A common stock or the notes at
that time. In addition, Coinbase expects that the option
counterparties or their respective affiliates may modify their
hedge positions by entering into or unwinding various derivatives
with respect to the Class A common stock and/or by purchasing or
selling shares of the Class A common stock or other securities of
Coinbase in secondary market transactions following the pricing of
the notes and from time to time prior to the maturity of the notes
(and are likely to do so following any conversion of the notes, any
repurchase of the notes by Coinbase on any fundamental change
repurchase date, any redemption date or any other date on which the
notes are retired by Coinbase, in each case if Coinbase exercises
its option to terminate the relevant portion of the capped call
transactions, where such termination is at its option). This
activity could also cause or avoid an increase or a decrease in the
market price of the Class A common stock or the notes, which could
affect the ability of noteholders to convert the notes and, to the
extent the activity occurs following a conversion or during any
observation period related to a conversion of the notes, it could
affect the number of shares and value of the consideration that
noteholders will receive upon conversion of the notes.
This capital raise represents an opportunity to bolster
Coinbase’s already strong balance sheet with low cost capital that
maintains operating freedom and minimizes dilution for Coinbase’s
stockholders. Coinbase intends to use the net proceeds from the
offering for general corporate purposes, which may include working
capital and capital expenditures, and to pay the cost of the capped
call transactions. If the initial purchasers exercise their option
to purchase additional notes, Coinbase expects to use a portion of
the net proceeds from the sale of such additional notes to enter
into additional capped call transactions. Coinbase may also use a
portion of the net proceeds to make investments in and acquisitions
of other companies, products or technologies that Coinbase may
identify in the future.
The notes will only be offered and sold to persons reasonably
believed to be qualified institutional buyers pursuant to Rule 144A
promulgated under the Securities Act by means of a private offering
memorandum. Neither the notes nor the shares of Coinbase’s Class A
common stock potentially issuable upon conversion of the notes, if
any, 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.
This announcement is neither an offer to sell nor a solicitation
of an offer to buy any of the notes or any shares of Class A common
stock potentially issuable upon conversion of the notes and shall
not constitute an offer, solicitation, or sale in any jurisdiction
in which such offer, solicitation, or sale is unlawful.
About Coinbase
Coinbase is building the cryptoeconomy – a more fair,
accessible, efficient, and transparent financial system enabled by
crypto. Coinbase started in 2012 with the radical idea that anyone,
anywhere, should be able to easily and securely send and receive
Bitcoin. Today, Coinbase offers a trusted and easy-to-use platform
for accessing the broader cryptoeconomy.
Cautionary Statement Regarding Forward-Looking
Statements
This press release contains “forward-looking statements”
including, among other things, statements relating to the
completion, timing, and size of the proposed offering, the granting
of a 30-day option to purchase additional notes, the potential
effects of capped call transactions, and the expected use of
proceeds from the offering. Statements containing words such as
“could,” “believe,” “expect,” “intend,” “will,” or similar
expressions constitute forward-looking statements. These
forward-looking statements are made pursuant to the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995.
These statements involve risks and uncertainties that could cause
actual results to differ materially, including, but not limited to,
whether or not Coinbase will offer the notes or consummate the
offering, the final terms of the offering, prevailing market
conditions, the anticipated principal amount of the notes, which
could differ based upon market conditions, the anticipated use of
the net proceeds of the offering, which could change as a result of
market conditions or for other reasons, the impact of general
economic, industry or political conditions in the United States or
internationally, including the impacts of the COVID-19 pandemic,
and whether the capped call transactions will become effective. The
foregoing list of risks and uncertainties is illustrative, but is
not exhaustive. For information about other potential factors that
could affect Coinbase’s business and financial results, please
review the “Risk Factors” described in Coinbase’s Quarterly Report
on Form 10-Q for the quarterly period ended March 31, 2021, filed
with the Securities and Exchange Commission (the “SEC”) and in
Coinbase’s other filings with the SEC. Except as may be required by
law, Coinbase undertakes no obligation, and does not intend, to
update these forward-looking statements after the date of this
release.
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version on businesswire.com: https://www.businesswire.com/news/home/20210517005881/en/
Press: press@coinbase.com Investors: investor@coinbase.com
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