- Coinbase recently announced it would increase its bond buyback limit by $30 million.
- The cryptocurrency exchange is now willing to spend $180 million to repurchase its outstanding 3.625% senior notes.
- Bondholders have previously expressed little interest in selling their senior notes to cryptocurrency exchanges.
- Investors have issued more than $50 million worth of bonds in the last month.
Crypto giant Coinbase announced it will increase its bond repurchase limit by $30 million. The California-based cryptocurrency exchange is now willing to spend $180 million to repurchase its outstanding 3.6% senior notes due in 2031.
A senior note is a bond that has priority over other forms of debt payments in the event that the issuing company declares bankruptcy and is forced into liquidation. The interest rates on these notes are relatively low because they carry a lower level of risk.
Coinbase investors bid for $211 million worth of bonds
Interim results from Coinbase’s cash tender for outstanding bonds released earlier today showed that the company has modified the terms of the tender offer to increase the amount of senior notes available for purchase, with a maximum total purchase price of $180 million. The deadline for the tender offer has also been extended to September 18, 2023.
Last month, Coinbase issued a tender offer to acquire a portion of its 3.625% senior notes due 2031. However, the offer failed to generate interest from bondholders, indicating their bullish sentiment towards the notes. At the time, investors tendered about $50 million worth of bonds. According to reports, another $211 million worth of bonds have since been tendered.
The latest move to buy back outstanding senior notes comes less than a month after Coinbase made an initial offer to buy back part of $1 billion in bonds. Following a fairly strong performance in the second quarter of 2023, the cryptocurrency giant offered its investors a premium on senior notes. At the time, the exchange said investors who sold the bonds before Aug. 18 would receive a gain of 64.5 cents.
