Bitcoin mining company Marathon Digital Holdings (NASDAQ:MARA) on Wednesday announced plans to raise up to $1 billion through a private offering of zero-coupon convertible senior notes due 2032, according to a recent SEC filing.
The offering begins at $850 million, with an option allowing initial purchasers to buy an additional $150 million in notes. Only qualified institutional buyers are eligible to participate in the transaction, according to an SEC filing.
These notes will carry no regular interest payments and may be converted into cash, MARA shares, or a combination of both, based on the investor's preference.
The notes mature in August 2032, although holders can request redemption in August 2030 under certain conditions tied to MARA's stock performance.
Marathon will also have the ability to redeem the notes starting in 2030, if specific pricing thresholds are met.
The company intends to allocate up to $50 million from the proceeds to buy back part of its existing 1% convertible notes due in 2026, aiming to reduce near-term debt.
The remaining capital will support Bitcoin purchases, operational costs, infrastructure development, and potential strategic acquisitions, the filing stated.
A portion of the proceeds will be used for "capped call" transactions, a financial hedge designed to limit stock dilution if the notes are converted to equity, helping preserve shareholder value.
Marathon is currently the second-largest public holder of Bitcoin (CRYPTO: BTC), with 50,000 BTC valued at approximately $5.9 billion, according to data from Bitcoin Treasuries.
This puts it behind only Strategy (NASDAQ:MSTR) in terms of corporate Bitcoin reserves, and well ahead of its mining sector peers.
Despite the announcement, MARA stock fell more than 4% to $19.05 in Wednesday's pre-market trading session.
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