Coinbase Ups Its Debt Repurchase Bond Buyback Program to $180M

Coinbase Ups Its Debt Repurchase Bond Buyback Program to $180M

UTC by Bhushan Akolkar · 3 min read
Coinbase Ups Its Debt Repurchase Bond Buyback Program to $180M
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Coinbase has decided to increase the buyback cap to a substantial $180 million thereby leading to a notable surge in investor participation.

On Tuesday, September 5, the world’s leading crypto exchange Coinbase announced that it is topping its debt buyback from $150 million previously, to now at $180 million. Thus, Coinbase is willing to buy back a larger number of its outstanding Notes than it unveiled previously.

As per the announcement made on September 5, Coinbase has allocated $180 million towards the repurchase of its 3.625% senior notes that will mature in 2031. The offer will expire on September 18 at 11:59 pm Eastern Time (3:59 am UTC).

Coinbase Bond Buyback Program

Coinbase initially initiated its bond buyback program with a limit of $150 million, but the response was tepid, with only $50 million in bonds offered for repurchase. This lukewarm reception suggested that investors were hesitant to part with their bonds, possibly anticipating future value appreciation.

However, in an unexpected twist, Coinbase has decided to increase the buyback cap to a substantial $180 million, leading to a notable surge in investor participation. This shift in Coinbase’s bond buyback program has garnered attention within the crypto industry.

At the time of the announcement, Coinbase had accepted $50 million worth of tendered notes for repurchase, while an additional $211 million in tendered notes remained unaccepted, making the total amount $261 million. As per Coinbase’s offer, investors whose tendered 2031 notes are repurchased by the exchange will receive 67.5 cents on the dollar.

The 2031 notes originally had $1 billion in principal outstanding and were issued in September 2021. They are presently trading close to the offer value, having previously dropped to as low as 46 cents on the dollar in early January due to investor concerns regarding Coinbase’s creditworthiness.

Coinbase to Offer Crypto Loans

In another development, crypto exchange Coinbase announced its decision to provide crypto loans to US institutional investors. The crypto exchange seeks to capitalize on the vacuum left after the collapse of top crypto lenders like BlockFi and Genesis Global.

Clients of Coinbase Prime, have already allocated $57 million to the lending program, as disclosed in a recent filing with the U.S. Securities and Exchange Commission. Coinbase Prime operates as a comprehensive prime brokerage platform, facilitating trade execution and asset custody for institutions.

In a statement released on Tuesday, Coinbase explained that institutions can now opt to lend their digital assets to the platform under standardized terms.

It’s worth noting that Coinbase has previously entered the lending space. In May, the company halted the issuance of new loans through a service designed for retail investors, known as Coinbase Borrow. The same entity – Coinbase Credit, shall be managing the new institutional program.

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