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MicroStrategy returns the total Bitcoin collateralized loan

On the 23rd of March, 2022, MicroStrategy happened to have approached the Silvergate Bank and duly signed a Credit and Security Agreement, through which it received a loan amounting to $205 million from the bank. The loan happened to have come with a clause mentioning the fact that the loan amount was to be returned by the 23rd of march 2025. In all, a three-year loan. There was also the mention of a payable interest amount at a floating rate equivalent to the SOFR 30-Day Average, with an added amount of 3.70%, having a floor of 3.75%. This is according to the website of the Federal Reserve Bank of New York. 

By the 24th of March, 2023, the floating rate happened to have been 8.27%. Against the loan, there was a collateral arrangement made with some amount of Bitcoin that was in possession of MicroStrategy, along with the figure of $5 million, in terms of a cash reserve that belonged to the company and was with the Silvergate Bank. As per the terms and conditions pertaining to the agreement that had been inked, it was necessary for MicroStrategy to hold on to a loan-to-collateral value ratio lower than 50%. By the 24th of March, 2023, the holding happened to have been almost 34,619 Bitcoins within a collateral account that was set up against the loan. 

On the 24th of March, 2023, MicroStrategy, along with Silvergate Bank, happened to have inked another deal in the form of a prepayment, Waiver, and Payoff to Credit and Security Agreement, following which the company, on its own initiative, paid back almost $161 million to the Silvergate Bank, as a payoff amount, pertaining to the total amount of loan taken, and as per the agreement that had been signed. Thereafter, Silvergate, having received its due, let out the security interest attached to all of the assets belonging to the company and happened to have been put up as collateral against the loan. This also had Bitcoin.

MicroStrategy carried out a declaration on the 27th of March, 2023, that from the 16th of February, 2023, to the 23rd of March, 2023, the company had obtained a figure of nearly A Bitcoins in exchange of nearly $150 million in the form of cash. This happened to have been almost $23,238 for every Bitcoin, and it also included fees and other expenses. On the 23rd of March, 2023, the company was in possession of nearly 138,955 Bitcoins, which happened to have been obtained for nearly $4.14 billion, having a buying rate of nearly $29,817 for a single Bitcoin. All of this was in terms of the company, as well as its affiliates. 

On the 9th of September, 2022, the company inked a Sales Agreement with Cowen and Company, along with BTIG, as sales agents, following which the company could be allotting and selling the shares of its class. Common stock at the rate of $0.001 for every share. A collective price was offered, going up to $500 million at times and through the agents. On the 27th of March, 2023, the company further declared that it had released and sold 1,348,855 shares between the 1st of January and the 24th of March, 2023. This was as per the agreement, and the company would be receiving nearly $339.4 million. The amount that was duly returned by the company happened to have been totally funded with the utilization of the amount received from the selling of shares. Along with that was the amount of $5 million that was from the cash reserve account held by the Silvergate Bank.  

Edward Nash

Edward Nash is an editor and analyst with over 10 years of financial market experience. Prior to joining CoinNewsSpan, he worked in several famous financial institutions. He has been active in the cryptocurrency market since 2011, specializing in technical analysis of current crypto trends and offering analytical opinion-based pieces.

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