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MicroStrategy raises bitcoin-related junk bonds to $ 500 million



(Bloomberg) – MicroStrategy Inc. increased the sale of junk to fund the purchase of more bitcoins by selling $ 500 million banknotes on Tuesday, the first of its kind in the high-yield market.

The company has received about $ 1.6 billion in supply orders, including interest from a large number of hedge funds, according to people familiar with the marketing process, who asked not to be identified when discussing a private deal. The strong interest comes amid a collapse in the value of bitcoin.

The company, led by Michael Sailor, has emerged as one of the top public cryptocurrency companies. It has already issued convertible bonds worth about $ 1

billion in a bid to take more than the coins, although this is the first-ever sale of corporate bonds with proceeds for such purchases. Sailor’s focus on bitcoins, including making it an official corporate strategy, has angered critics.

MicroStrategy had originally planned to issue $ 400 million in debt and had already seen such high demand at the time the deal was launched on Monday. It sells secured banknotes at a yield of 6.125%, according to someone familiar with the issue, lower than early pricing discussions by 6.25% to 6.5%.

Read more: MicroStrategy sells corporate bonds to buy bitcoin

Representatives of the company and Jefferies Financial Group Inc., the sole manager of the proposal, did not respond to requests for comment.

Tysons Corner, a Virginia-based company, said on Monday it was taking on about $ 284.5 million during its next earnings report due to losses related to fluctuations in the price of the digital asset. This amounts to more than the company’s cumulative profits since 2011.

As of mid-May, MicroStrategy had accumulated 92,079 bitcoins, which it said had been acquired for about $ 2.25 billion, compared to an average of about $ 24,450 per token.

(Final pricing updates.)

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