Coinbase Increases Offer on $150 Million Debt Buyback Amid Weak Demand

Crypto exchange Coinbase has increased the offer price for its $150 million debt buyback program following lukewarm investor demand.

In an announcement on August 21, Coinbase revealed that since the buyback program commenced earlier in the month, investors had tendered just over $50 million in bonds against the $150 million target. Consequently, the exchange raised its offer for the 3.625% Senior Notes due 2031 from 64.5 cents on the dollar to 67.5 cents on the dollar. Coinbase stated:

“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.”

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

Despite facing allegations of selling unregistered securities from the U.S. Securities and Exchange Commission, Coinbase stock has recovered 50% since the lawsuit was filed, although it has recently given up most of those gains. Cathie Wood, CEO of Ark Invest, sold $12 million worth of Coinbase stock last month after aggressively buying throughout much of 2022.

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