Bitcoin miner Core Scientific increases senior bond offering to $400 million

Core Scientific, a Texas-based bitcoin mining company, announced the pricing of its upsized offering of $400 million of 3.00% convertible senior notes due 2029. The initial offering size was $350 million, which was increased due to favorable market conditions.

The bonds, which are expected to settle on August 19, 2024, will be issued privately to qualified institutional buyers. Initial purchasers will be granted an option to purchase an additional $60 million of bonds.

Core Scientific Launches $400 Million Senior Notes Offering

According to the official press release, these unsecured notes, bearing interest semi-annually, will mature on September 1, 2029, unless previously converted, redeemed or repurchased.

“Core Scientific will settle the conversions by paying or delivering, as the case may be, cash, shares of its common stock or a combination of cash and shares of its common stock, at Core Scientific’s election. The initial conversion rate is 90.9256 shares of its common stock per $1,000 principal amount of notes, representing an initial conversion price of approximately $11.00 per share of its common stock.”

Core Scientific expects to raise approximately $386.6 million from the offering, with a potential increase of up to $445 million if additional notes are purchased.

After repaying $61.2 million of outstanding loans and $150.0 million of senior secured notes due 2028, the remainder will be used for general corporate purposes, such as working capital, expenses and acquisitions.

Bankruptcy and beyond

Core Scientific filed for bankruptcy protection in December 2022 after a downturn in the cryptocurrency market and the bankruptcy of its partner Celsius. After a bankruptcy court approved its Chapter 11 restructuring plan in January, the company shed $400 million in debt and continued operations. Since returning to the stock market, its stock price has risen 145% to $8.46 per share on the Nasdaq.

Its shift to artificial intelligence (AI) has been crucial. For example, the mining company revealed a larger deal valued at $6.7 billion with CoreWeave, an Nvidia-backed startup that provides AI model technology to a key chipmaker. Core Scientific will provide an additional 112 megawatts of computing power to boost CoreWeave’s operations.

Earlier this month, Core Scientific CEO Adam Sullivan reportedly told CNBC:

“We have experienced phenomenal growth since our inception in January and have focused on developing a world-class digital infrastructure. This infrastructure advantage has allowed us to diversify our revenues and reallocate some facilities to meet the growing need for technology required for AI.”