Cipher Digital Inc. (NASDAQ:CIFR) shares are trading lower after the company announced a proposed private offering of $850 million of 0.00% convertible senior notes due 2032, along with a concurrent exchange of a portion of its convertible notes due 2030.
- Cipher stock is testing key support levels. Why did CIFR hit a new low?
Cipher Proposes $850 Million in Zero-Interest Notes to Fund Barber Lake and Its HPC Pipeline
Cipher intends to offer $850 million of convertible senior notes due November 1, 2032, to qualified institutional buyers, and expects to give the initial purchasers a 13-day option to buy up to an additional $150 million. The notes will be senior unsecured obligations that pay no regular interest. Cipher can settle conversions in cash, shares of common stock or a combination of both. The conversion rate and other final terms will be set at pricing.
Cipher plans to use part of the net proceeds to pay for capped call transactions, which are generally expected to reduce potential dilution from conversion. The remainder would go toward additional equity investment in the Barber Lake project, the build-out of its high-performance computing strategy across its near-term pipeline, expanding its pipeline of development sites and general corporate purposes.
Cipher Also Plans to Exchange Part of Its 2030 Notes for Shares
Concurrently, Cipher expects to enter into privately negotiated agreements with a limited number of holders of its 1.75% convertible senior notes due 2030 to exchange a portion of those notes for shares of common stock. The company said holders who take part in the exchange may buy or sell Cipher shares or unwind hedge positions, and that this activity, along with the hedging by the capped call counterparties, could raise or lower the share price.
Cipher Shares Crash
CIFR Price Action: At the time of publication, Cipher shares are trading 12.47% lower at $11.38, according to data from Benzinga Pro.
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