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

Scheduled to settle on August 19, 2024, the notes will be issued privately to qualified institutional buyers. The initial buyers will be granted an option to acquire an additional $60 million in notes.

Core Scientific Launches $400M Senior Notes Offering

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

Core Scientific will settle conversions by paying or delivering, as applicable, 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 common stock per $1,000 principal amount of notes, which represents an initial conversion price of approximately $11.00 per share of common stock.

Core Scientific expects to gain around $386.6 million from the offering, potentially reaching $445.0 million if additional notes are purchased.

After repaying $61.2 million in outstanding loans and $150.0 million in senior secured notes due in 2028, the rest will go towards general corporate needs like working capital, expenses, and acquisitions.

Bankruptcy and Beyond

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

Its pivot to artificial intelligence (AI) was crucial. For instance, the mining company disclosed a larger agreement valued at $6.7 billion with CoreWeave, a startup backed by Nvidia and a key chipmakers AI model technology supplier. Core Scientific will supply an extra 112 megawatts of computing power to boost CoreWeaves operations.

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

We’ve seen tremendous growth since our emergence in January and have been laser-focused on developing best-in-class digital infrastructure. This infrastructure advantage has allowed us to diversify revenue and reallocate certain facilities to address the growing need” for the type of technology required for AI.