Coinbase has begun buying back its debt instruments at a discount amid the ongoing crypto bear market.
According to a June 15 announcement, cryptocurrency exchange Coinbase hasinto an agreement for the redemption of $64.5 million in 0.50% Convertible Senior Notes due 2026. However, the company estimates it will only need $45.5 million in cash to consummate the agreement due to the notes' 29% discount to par value. Coinbase wrote:
"The Repurchases are expected to close on or about June 20, 2023, subject to the satisfaction of customary closing conditions. Following such closings, approximately $1.373 billion principal amount of the Notes will remain outstanding." Alesia Haas, Coinbase's chief financial officer, described the transaction as an"opportunistic repurchase" and said the firm would continue to look for such opportunities in the future. Many of Coinbase's debt instruments have been trading at discounts since the onset of the cryptocurrency bear market.that if the company were to go bankrupt, users’ digital assets held on the platform may “be subject to bankruptcy proceedings” and could see them treated as “unsecured creditors.
It appears that investors haven't been enticed by the discounts, however. On June 6, the U.S. Securities and Exchange Commission charged Coinbase for operating an unregistered securities exchange and the sale of unregistered securities from its staking-as-a-service program. The litigation is ongoing.
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