Marathon Digital, a Nasdaq-listed Bitcoin mining company, has announced plans to increase its debt offering to $1 billion, with zero-interest senior notes maturing in 2030. The firm initially aimed to raise $700 million but increased the offering to $980 million due to investor demand. The notes will be convertible into cash, shares of MARA’s common stock, or a combination of both.
The unsecured senior notes come with no regular interest and will mature on March 1, 2030, unless redeemed, converted, or repurchased earlier. A portion of the funds will be used to acquire more Bitcoin for the company’s treasury. Marathon also plans to repurchase $212 million in convertible notes due in 2026. The conversion rate for these new notes is set at 38.5902 shares of MARA stock per $1,000 principal, equating to an initial conversion price of around $25.91 per share.
Marathon’s Chief Financial Officer Salman Khan noted that this offering represents the highest premium for a zero-coupon offering since 2021. Market observers believe that this move reflects Marathon’s flexibility to mine or purchase Bitcoin directly, depending on cost efficiency. The company expects to net approximately $833 million from the offering, potentially increasing to $980 million if buyers fully exercise their options for additional notes.
The remaining proceeds from the debt offering will fund Bitcoin acquisitions, corporate expansion, strategic investments, and debt repayment. Marathon currently holds 27,562 BTC, valued at approximately $2.5 billion, making it the second-largest Bitcoin-holding public company after MicroStrategy. MicroStrategy holds over 331,000 BTC, worth over $30 billion.
In conclusion, Marathon Digital’s decision to increase its debt offering to $1 billion reflects investor demand and the company’s strategy to acquire more Bitcoin for its treasury. The zero-interest senior notes offer flexibility for conversion into cash or shares of MARA stock. The conversion rate and premium for this offering are significant, showcasing potential value for investors. With plans to repurchase existing convertible notes and fund various initiatives, Marathon aims to strengthen its position in the Bitcoin market.
