Crypto Brokerage Firm Galaxy Digital Plans to Raise $500M through Convertible Debt

UTC by Bhushan Akolkar · 2 min read
Crypto Brokerage Firm Galaxy Digital Plans to Raise $500M through Convertible Debt
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The 4500 million worth of senior notes will be convertible in the form of company equity to further fund business expansion and venture into new growth areas in the crypto space.

On Monday, November 29, Mike Novogratz’s merchant bank and crypto brokerage firm Galaxy Digital announced the plan of raising $500 million through convertible senior notes. The announcement comes as the company plans for further expansion in the crypto and blockchain space.

The senior notes are convertible in the form of company equity bearing an interest rate of 3% per annum with its maturity in 2026. As per the press release, the deal will close in the next month of December subject to approval from the Toronto Stock Exchange. Galaxy Digital is also a public listed company with its stock trading on TSX. The press release mentions:

“The Notes will mature on December 15, 2026 unless earlier exchanged, redeemed or repurchased. Interest on the Notes will be payable on June 15 and December 15 of each year, beginning on June 15, 2022. The Notes will be general senior unsecured obligations of the Issuer. The Issuer may not redeem the Notes prior to December 15, 2024. The Issuer may redeem for cash all or part of the Notes”.

This Cayman Islands-based company of Mike Novogratz offers services like crypto trading, asset management, investment banking, and new token mining. The Galaxy Digital founder also aims to make this company the Goldman Sachs of the crypto industry. The company has also registered staggering growth over the last year. For Q3 2021, Galaxy Digital reported a net income of $517 million, up from $41.5 million in Q3 2020.

Galaxy Digital to Use Funds Raised through Convertible Debt for Business Expansion

Apart from expanding its business management business, Galaxy Digital is also planning for launching a new fund. Furthermore, the company plans to soon kickstart its mining operations. Additionally, the funds will also go towards hiring new talent as the company plans to hire new talent taking its headcount to 850 and more.

Galaxy Digital has also made some key acquisitions this year in 2021. Back in May, the company purchased crypto custodian BitGo in a staggering $1.2 billion stock and cash deal. Post the acquisition, the company declared itself the “first full-service financial platform for digital assets”.

Besides, Galaxy Digital is also venturing into other emerging platforms of NFTs, DeFi, and Metaverse. Since the beginning of 2021, Galaxy Digital has invested $62 million of its capital into 22 different NFT companies.

Besides, Galaxy Digital also partnered with Bloomberg for a new DeFi Index. Similarly, it has partnered with TIME Magazine on different Metaverse publications.

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Bhushan Akolkar

Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.

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