Coinbase to Raise $2 Billion in Private Bond Placement

Cryptocurrency exchange Coinbase has announced its intention to issue $2 billion in convertible senior notes in a private placement.

The announcement weighed on investor sentiment. Coinbase shares fell more than 5% in early trading on August 3 to trade at around $307, continuing their recent decline despite strong quarterly profits.

Coinbase said the offering consists of two separate $1 billion tranches. The notes, intended for qualified institutional investors, will mature in 2029 and 2032.

The crypto exchange views raising capital as a strategic move to build significant “strategic headroom.” By raising funds now, Coinbase is preparing to take advantage of future market opportunities that could include acquiring other companies, products, or technologies. For example, this year the company acquired blockchain advertising platform Spindl along with its entire team.

Coinbase also intends to use the proceeds to fund working capital and repurchase some of its shares or other debt. Some of the proceeds will also be used for capped call transactions designed to minimize potential equity dilution from the bond conversion.

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