Mara taps into surging bitcoin with US$950m CB
Mara restarted the CB cash-to-crypto funding train by raising an upsized US$950m late on Wednesday from the sale of seven-year convertible bonds, the longest-dated issue in what is now a US$3.1bn CB funding complex.
Morgan Stanley and Barclays were joint bookrunners on pricing of the new CBs at a zero-percent coupon and a 17.5% conversion premium after one day of marketing at a fixed zero-percent coupon and 15%–25% conversion premium.
Despite pricing the CBs towards the investor-friendly end of the talk, the banks were able to increase the offering from US$850m.
“With bitcoin trading at all-time highs, everyone has been asking where all the new paper is. Here it is,” said one banker involved in the offering. “Mara viewed this as opportunistic funding. They want to buy back some of their existing bonds, and this financing gives them flexibility if bitcoin prices fall.”
Bitcoin is trading at a near record high US$118,800 after surging 25% this year following the US passage of favourable crypto legislation. At current prices, Mara’s stash of 49,940 bitcoin as of June 30 is worth US$5.9bn or US$16.86 per share.
The CB financing will push those holdings above the coveted 50,000, extending Mara's lead as the second-largest bitcoin hoarder behind Michael Saylor’s Strategy and the 601,550 Bitcoin it holds.
Mara shares fell 11.6% Wednesday to US$17.57, though the reference price on the CBs was at a lower US$17.24 based on VWAP of 2:00pm–4:00pm trading. To offset dilution from the CBs, the company purchased a capped call to increase the effective conversion price to US$24.14, a 40% premium to the reference price.
As with all crypto financings, this was purely a technical trade.
In marketing the CBs, the banks guided accounts toward a S+700bp credit spread and 50 implied vol, the former supported by the US$2.2bn of existing bonds in place and the latter by 90-plus realised vol over the past 200 days.
As part of the CB financing, Mara negotiated the repurchase of up to US$19.4 principal of a 1% CB issue that is convertible at US$76.17 and matures in December 2026, trimming that obligation to US$43m.
In addition to the new CBs, Mara has a 1% CB issue maturing in 2030 that can be put in December 2027 and is convertible at US$25.91, a US$925m zero-percent CB puttable in June 2027 and convertible at US$28.92, and a US$300m 2.125% CB puttable in March 2029 that is convertible at US$18.88.
The new CBs can be put back to the company in January 2030, making it the longest-dated security in the Mara complex.
Part of the engineering underlying such a large debt load is equity. In late 2023, Mara exchanged US$417m worth of the 2030 CBs (deep out of the money) for 24.2m shares. Mara issued another US$1.5bn worth of stock through an at-the-market programme in 2024/early 2025 and in March put in place a new US$2bn ATM.
Mara is using the rest of the money to acquire bitcoin.
Unlike Strategy, Mara also mines bitcoin. In June, it mined 713 bitcoin and is in the process of expanding production by adding additional mining capacity.