The interest rates and the repayment policy will be determined in cooperation with the first-time buyers, announced the exchange
The notes are not registered under the Securities Act, explained Coinbase
In a press release yesterday, U.S. cryptocurrency exchange Coinbase announced that it is seeking a private offer totaling $ 1.5 billion of its senior notes maturing in 2028 and 2031, and Exchange confirmed that its wholly-owned subsidiary Coinbase Inc will guarantee the bond offer .
Senior Notes refer to debt securities that provide investors with priority rights in the event of a company going bankrupt. While the interest paid to investors is lower than that of junior notes, the bond offering is preferred because in the event of a company defaulting, it will be repaid before others.
Coinbase stated that the interest rate and repayment terms for the note offering have not yet been set and will be the result of negotiations between the first-time buyers and the exchange. In addition, the company announced that it will only offer the Notes and related benefits through a private offering memorandum to individuals who “Reasonably assumed that they are qualified institutional buyers“Both within local US law and abroad.
“Neither the Notes nor the accompanying guarantee have been or will be registered under the Securities Act or the securities laws of any other jurisdiction and, if not registered, may not be offered or sold in the United States except under an applicable exception to such registration requirements“Clarified the exchange.
Coinbase, which went public as the first cryptocurrency exchange earlier this year, plans to use the funds raised to bolster its balance sheet with low-cost capital.
In addition, the exchange seeks to use the proceeds for investments in product development, potential investments and acquisitions in products and technologies of other countries, as well as other general corporate expenses.
The exchange, with a daily trading volume of over $ 5.6 billion, recently hit the headlines over its dispute with the US Securities and Exchange Commission. The SEC did threatened Sue Coinbase if the exchange continues its upcoming crypto loan program and classifies it as a security.
While CEO Armstrong has claimed that the SEC has not objected to similar products from other crypto firms, the SEC maintains its position and even invites crypto leaders to enter into dialogue.