In an announcement on Oct. 13, Metaplanet said it would issue ¥52 billion ($329 million) in unsecured, zero-coupon Euro-yen convertible bonds due in 2031. The offering is expected to close on Oct. 29, target investors primarily in Europe and Asia, and will be listed on the Singapore Exchange.
The company said the financing would let it replace part of its interest-bearing, Bitcoin-collateralised debt with borrowing that requires no regular interest payments. It expects the restructuring to free up pledged Bitcoin, reduce financing costs and improve financial flexibility without selling its cryptocurrency holdings.
Metaplanet's move comes as its reliance on Bitcoin-backed borrowing has surpassed its own guidelines. As of Sept. 30, the company had about $649.5 million outstanding under an $800 million credit facility secured by its Bitcoin holdings. That represented 17.7% of the net asset value of its Bitcoin reserves, well above management's target of keeping the ratio below 10%.
The company, which held 44,000 BTC at the end of September, acknowledged that further declines in Bitcoin prices could increase the borrowing ratio by reducing the value of its holdings.
To address that exposure, Metaplanet plans to use about ¥23.6 billion ($149 million) of the new bond proceeds to repay part of its outstanding loans in November. That repayment would reduce borrowing under the facility to roughly $500.5 million and lower the ratio to about 13.6%, assuming asset values remain unchanged.
The company noted that the figure would still leave it above its preferred leverage threshold, and that replacing its Bitcoin-backed loans with convertible bonds would not immediately reduce total liabilities, even as it lowers interest expenses and reliance on pledged collateral.