Coinbase Eyes Strategic Bond Buyback Amidst BTC Surge – Investor Bites

SNEAK PEEK

• Coinbase plans $150 million bond buyback amidst Bitcoin’s rise.
• Bitcoin’s peak influences Coinbase’s bond market strategy.
• CEO Armstrong comments on USDC stability despite Binance’s shift.

Coinbase Global Inc., a behemoth cryptocurrency exchange, has announced its intention to repurchase some of its outstanding junk bonds, according to Archive Today. This decision comes when the cryptocurrency market, particularly Bitcoin, is experiencing significant fluctuations, trading near its peak value for the year.

Coinbase’s offer revolves around the redemption of up to $150 million of its 3.625% notes, which are set to mature in October 2031. Those investors keen on tendering their bonds stand to gain between $615 and $645 for every $1,000 of the principal amount. With the deadline set for September 1, 11:59 p.m. NY time, the clock is ticking for stakeholders to move.

This announcement is particularly noteworthy given Bitcoin’s recent trading patterns. As of writing time, the cryptocurrency was valued at $29,158, a slight dip from its July peak of $31,386 – the highest since 2022, according to CoinMarketCap.

Interestingly, the debt Coinbase aims to buy back was valued at 62 cents on the dollar at Monday’s bond market close, showing a remarkable recovery from its record low of 52 cents in November.

Coinbase isn’t navigating these waters alone. They’ve enlisted the expertise of Citigroup Global Markets Inc. to oversee the tender offer. This trend of corporate entities buying back debt is gaining traction, especially as rising interest rates make refinancing a pricier endeavor. Just last week, Warner Bros. Discovery Inc. expressed intentions to repurchase bonds worth up to $2.7 billion, and Verizon Communications Inc. initiated a $1.5 billion bond buyback in July.

On a related note, Coinbase CEO Brian Armstrong recently made headlines with his remarks about the USD Coin (USDC) stablecoin during the company’s Q2 earnings call. Armstrong highlighted that despite Binance, another major crypto exchange, moving its funds from USDC to a different stablecoin, USDC’s market cap remains robust. This is significant as Coinbase is a key player in the consortium that owns USDC, emphasizing its preference for this stablecoin.

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• Source: https://investorbites.com/coinbase-eyes-strategic-bond-buyback-amidst-btc-surge/