Coinbase has stated that it is going to buy back a portion of its $1 billion bond at a premium. The condition is that the interested investors should avail the offer by August 18, 2023. Those who will get a premium of 64.5 cents on every dollar. The amount received will be in proportion to $645 for every $1,000 of the face value of the bond.
Coinbase is basically looking to buy back $150 million worth of bonds. This follows its robust financial performance in the second quarter of 2023. Coinbase is reaching out to investors to make sure that it makes the right offer to them. The amount they get (as stated earlier) will include the early-tender premium worth $30.
There is a chance that interested inventors may miss out on the early window. Hence, Coinbase has given an alternate option of showcasing their interest after August 18, 2023, but before September 01, 2023. They will still be eligible for the premium, but the amount would have shortened a little bit.
Per the announcement, those who participate in the buyback program of Coinbase in the second window will get $615 for every thousand dollars in face value. This translates to 61.5 cents for every dollar. The unaffected price of the bond remains at 60 cents on the dollar, as per the reports published by Business Insider.
Coinbase is working in partnership with Citigroup Global Markets to execute the buyback program. The bonds to be bought back are maturing in 2031. There are two more bonds expiring in 2026 and 2028. The collective value surpasses the mark of a billion dollars.
Performance in the second quarter of 2023 has been defined as robust simply because the crypto venture was able to resist the estimates of the market. Its revenue for Q2-2023 stands at $708 million. Analysts had estimated the figure to dance around $628 million. The same case is with earnings-per-share loss. Coinbase recorded the numerical at $0.42, while the analysts had estimated it to sit at $0.76.
Another factor that is likely to help Coinbase in executing the buyback plan is the price of Bitcoin, BTC. While the token is exchanging hands at a value of less than $30k, it is still closer to the most recent high. BTC was last seen being traded at $29,356.50, an increase of 27.91% in the past six months. Its performance in the last 24 hours has been greener as well. The rise of 0.60% makes it evident. The highest it has gone in the 24 hours is $29,392.70.
Buying bonds back from investors is an activity that has been looked at favorably by companies. It helps them bring down their interest expenses while also reducing their debt burden. As for investors, it means that they receive premiums and access to early liquidity.