CleanSpark joins the crowd in raising funds through convertible notes but doesn’t plan to invest the proceeds. Cryptocurrency miner CleanSpark Raises will raise $550 million through a private convertible note offering with a 2030 maturity date. Pricing is already completed. This funding strategy has become familiar among miners, following similar offerings from CleanSpark’s biggest competitors.
Cash for practical purposes
We anticipate closing the senior convertible note issuance on December 17th. Initial purchasers will have a 13-day window to purchase additional notes, with a maximum aggregate purchase price of $100 million. CleanSpark Raises estimates that the full exercise of the second purchase option will result in net proceeds of $633.6 million, or approximately $535.9 million, after discounts and expenditures.
The notes will not be subject to regular interest payments. The maturity date is June 15, 2030. The corporation will have the opportunity to redeem the notes on June 20, 2028. It can convert the notes into cash, common stock, or a mix of the two.
At the end of the first trading day on December 12, the common stock price on the Nasdaq Capital Market was $12.33 per share, 20% more than the initial conversion rate of $14.80 per share.
The offer includes approximately $221.5 million in expenses. The corporation will allocate about $145 million to repurchasing common shares from noteholders. The cost of capped phone interactions with unnamed financial organizations will add another $76.5 million.
An effective hedging technique would be to limit the price per share at conversion through a capped call transaction. The proceeds from the sale of the notes will fund various corporate objectives, acquisitions, capital expenditures, and the settlement of the remaining balance on the company’s line of credit, in addition to covering those expenses.
In its financial report for the third quarter, CleanSpark revealed that the company has taken up a $50 million revolving credit line with Coinbase, with some of its Bitcoin BTC$101,712 holdings serving as security.
How the pure players play
Eight publicly listed Bitcoin data centers and miners have issued convertible bonds since June. CleanSpark, similar to Riot Platforms and MARA, is a “pure-play” miner. This means that they have not diversified their processing capability into artificial intelligence or other high-demand uses.
In contrast to Riot and MARA, CleanSpark Raises has shown no intention of increasing its Bitcoin holdings. The convertible notes issued by MARA were $1 billion in November. The date of maturity is March 1, 2030. As of December 9th, MARA held 40,435 Bitcoin.
Riot disclosed similar ambitions to fund $500 million on December 9th. Its notes will mature on January 15, 2030. By December 12th, Riot had 16,728 BTC in its possession. As of November 30th, CleanSpark stole 9,297 BTC.
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