Marathon Digital Holdings Prices Oversubscribed $250M Convertible Senior Notes Offering

Marathon Digital Holdings, Inc. (NASDAQ: MARA), a leader in digital asset computing, has announced the pricing of an oversubscribed offering of $250 million in aggregate principal amount of 2.125% convertible senior notes due 2031. The notes will be sold in a private offering to qualified institutional buyers under Rule 144A of the Securities Act of 1933, as amended, according to Marathon Digital Holdings.

Details of the Offering

The company has also granted the initial purchasers an option to buy up to an additional $50 million in notes, increasing the option from the previously announced $37.5 million. The offering is expected to close on August 14, 2024, subject to customary closing conditions.

The notes will be unsecured senior obligations of MARA and will bear interest at a rate of 2.125% per annum, payable semi-annually in arrears on March 1 and September 1, starting March 1, 2025. Maturing on September 1, 2031, the notes can be repurchased, redeemed, or converted under certain conditions. The redemption option can be exercised by MARA starting September 6, 2028, if the company's stock price reaches at least 130% of the conversion price for a specified period.

Conversion and Repurchase Options

The notes are convertible into cash, shares of MARA common stock, or a combination of both, at MARA's discretion. Prior to March 1, 2031, conversion is allowed only upon certain events and periods, and thereafter, until the close of business on the second scheduled trading day before the maturity date. Initial conversion rates are set at 52.9451 shares per $1,000 principal amount of notes, equivalent to approximately $18.89 per share, subject to adjustment upon certain events.

Holders may require MARA to repurchase the notes on March 1, 2029, or upon certain fundamental changes, at 100% of the principal amount plus accrued interest. In specific corporate events or redemption calls, MARA may have to increase the conversion rate for holders opting to convert their notes.

Use of Proceeds

Marathon Digital estimates net proceeds of approximately $243.8 million, or $292.5 million if the option to purchase additional notes is fully exercised. The proceeds will primarily be used to acquire additional bitcoin and for general corporate purposes, including working capital, strategic acquisitions, expansion, and debt repayment.

About Marathon Digital Holdings

Marathon Digital Holdings is a global leader in digital asset computing, leveraging innovative technologies to support energy transformation and secure blockchain ledgers. The company focuses on converting clean, stranded, or underutilized energy into economic value.

This announcement includes forward-looking statements regarding the estimated net proceeds, use of such proceeds, and the anticipated closing of the offering. These statements are subject to risks and uncertainties, as outlined in the company's SEC filings.