Tag: debt offering

MicroStrategy prices upsized $900 mn debt sale to buy more Bitcoin, BFSI News, ET BFSI

Personal Finance

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Major bitcoin corporate backer MicroStrategy Inc on Wednesday upsized a debt offering through convertible notes to $900 million, with the proceeds to be used for buying more of the digital currency.

The company, whose Chief Executive Officer Michael Saylor is one of the most vocal proponents of bitcoin, said proceeds of the offering will be about $879.3 million.

MicroStrategy said on Tuesday it will borrow $600 million to buy more bitcoin, as the cryptocurrency surged past $50,000 in a rally fueled by wider acceptance among investors.

Elon Musk’s Tesla Inc bought $1.5 billion of the currency earlier this month and major firms such as BNY Mellon , asset manager BlackRock Inc and credit card giant Mastercard Inc have backed certain cryptocurrencies in recent weeks.

MicroStrategy, the world’s largest publicly traded business intelligence company, spent last year steadily amassing more bitcoin after making its first investment in August as the cryptocurrency soared in value.

The company already owns close to 72,000 bitcoin, according to a regulatory filing on Feb. 8, acquired at an aggregate purchase price of $1.15 billion and an average price of about $16,109 per bitcoin.

MicroStrategy’s bitcoin holding is valued at about $3.67 billion, based on Wednesday’s price of $51,721, according to a Reuters calculation.

The company bought nearly 25,000 bitcoin for $250 million in August last year, when it made a foray into the digital currency. Saylor at the time called bitcoin an attractive investment asset, with more long-term appreciation potential than cash.

MicroStrategy said last week it views its bitcoin coffers as long-term holdings and does not plan to regularly trade in the currency, hedge or enter into derivative contracts.



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Overwhelming response: PFC’s Tranche-I ₹5,000-cr NCDs oversubscribed in two days

Banking & Finance

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In just two working days since its launch, State-owned Power Finance Corporation’s (PFC) maiden ₹5,000-crore public issue of non-convertible debentures (NCDs) has been oversubscribed, reflecting an overwhelming response to this debt offering.

On the first day of the issue — January 15 — about ₹4,700 crore was raised, and the balance got done on Monday, sources in PFC said. The issue opened on Friday last and was due to be closed on January 29. As much as 80 per cent of the NCD issue is to be allocated to retail and high net worth individual investors.

It maybe recalled that this public issue has a base size of ₹500 crore and a green shoe option of ₹4,500 crore. With PFC having already filed a shelf prospectus with limit upto ₹10,000 crore, this state-owned infrastructure lender dedicated to the power sector, is next expected to roll out the Tranche II during the current fiscal itself.

Also read: Power Finance Corporation NCD: Should you invest?

PFC may wait for a period of two weeks before launching the next Tranche, sources added.

Each NCD — that carries AAA credit rating — has a face value of ₹1,000. Tranche I offered options for tenors of 3, 5, 10 and 15 years. The minimum application is for 10 NCDs. The coupon rates range from 4.65 per cent to 7.15 per cent depending on the tenor and the category of investor making the purchase.

PFC Chairman and Managing Director Ravinder Singh Dhillon had last week said that PFC’s NCD offering was a good bet for retail investors as it provided an alternative investment avenue with better yield and tenors.

Also read: Energy demand to grow 6-7% in FY22; discom finances under pressure: ICRA

At a time when banks were offering rates from 4.5-6 per cent across tenors (upto 10 years) and NSC was offering 5.8 per cent, the returns offered under PFC NCDs — although taxable — are better than other options, the company’s senior management had said.

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