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Coinbase sees lukewarm demand for debt buyback, raises offer

Crypto exchange Coinbase has raised the offer on its $150 million debt buyback program after lukewarm demand.

In an Aug. 21 announcement, Coinbase revealed that since the buyback program went into effect earlier this month, investors have tendered just over $50 million of bonds compared with a target of $150 million. Accordingly, the exchange raised its offer on 3.625% senior notes due in 2031 from 64.5 cents on the dollar to 67.5 cents on the dollar. Coinbase wrote:

“Holders of Notes (‘Holders’) who validly tendered and did not validly withdraw their Notes at or prior to the Early Tender Time are eligible to receive the Amended Consideration for the Notes accepted for purchase. Holders of Notes will also receive accrued and unpaid interest on their Notes validly tendered and accepted for purchase.”

Exactly $1 billion of Coinbase 3.625% senior notes due in 2031 were issued in September 2021, shortly before the onset of the cryptocurrency bear market, at approximately par value. The notes fell to an all-time low of 47 cents on the dollar in December 2022, when Coinbase CEO Brian Armstrong warned that the exchange may suffer a 50% decline in revenue due to the ongoing crypto rout. Their price has since recovered to around 64.5 cents on the dollar.

Despite facing allegations of selling unregistered securities from the United States Securities and Exchange Commission, Coinbase stock recovered 50% since the lawsuit was filed, albeit recently giving up most of its gains. Cathie Wood, CEO of ARK Invest, sold $12 million worth of Coinbase stock last month after buying aggressively for much of 2022.

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