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Strategy to repurchase $1.5 billion of 2029 convertible bonds using cash or bitcoin sales

BY Coindesk | CORPORATE | 08:38 AM EDT By AI Boost

Disclosure: The author of this story owns shares in Strategy (MSTR).

Strategy (MSTR), the world's largest corporate holder of bitcoin, has agreed to repurchase approximately $1.5 billion of its outstanding 0% Convertible Senior Notes due 2029 in privately negotiated transactions with certain noteholders, according to a filing released Friday morning.


The company expects to pay roughly $1.38 billion in cash for the notes, implying a discount to par value.

The 2029 convertible notes were originally issued in November 2024 with a 0% coupon and $3 billion notional size. The debt matures on Dec. 2, 2029 and carries a conversion price of $672.40 per share. The current share price sits significantly lower at $183.

The final repurchase price remains subject to adjustment and will partly depend on the volume-weighted average price of Strategy?s Class A common stock during a designated measurement period.


Strategy said it plans to fund the transaction using existing cash reserves, proceeds from share sales, and potentially bitcoin sales. Following settlement, expected around May 19, the repurchased notes will be cancelled, leaving roughly $1.5 billion of the 2029 notes outstanding.

MSTR common stock is down 2% in pre-market trading alongside an overnight slump in bitcoin back to $80,400.

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In general the bond market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities.) Fixed income securities also carry inflation risk and credit and default risks for both issuers and counterparties. Unlike individual bonds, most bond funds do not have a maturity date, so avoiding losses caused by price volatility by holding them until maturity is not possible.

Lower-quality debt securities generally offer higher yields, but also involve greater risk of default or price changes due to potential changes in the credit quality of the issuer. Any fixed income security sold or redeemed prior to maturity may be subject to loss.

Before investing, consider the funds' investment objectives, risks, charges, and expenses. Contact Fidelity for a prospectus or, if available, a summary prospectus containing this information. Read it carefully.

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