Core Scientific Launches $400M Senior Notes Offering

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.

Bitcoin mining company Core Scientific, headquartered in Texas, has announced the pricing of its increased offering for 3.00% convertible senior notes due in 2029, with a total value of $400 million. The offering was initially set at $350 million, but due to favorable market conditions, it has been upsized.

The notes will be sold privately to qualified institutional buyers and are scheduled to settle on August 19, 2024. The initial buyers will also be granted an option to acquire an additional $60 million in notes.

Core Scientific Launches Offering for $400M Senior Notes

The official press release states that these unsecured notes will accrue interest semi-annually and 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 anticipates a net gain of approximately $386.6 million from the offering, which could reach $445.0 million if additional notes are purchased.

The proceeds will be used to repay $61.2 million in outstanding loans and $150.0 million in senior secured notes due in 2028, with the remainder allocated for general corporate needs, including working capital, expenses, and acquisitions.

Bankruptcy and After

Core Scientific filed for bankruptcy protection in December 2022, following a downturn in the crypto market and the partner Celsius’ failure. The firm continued operating after a bankruptcy court approved its Chapter 11 restructuring plan in January, reducing $400 million in debt. Since returning to the stock market, the price has surged by 145%, reaching $8.46 per share on the Nasdaq.

The company’s pivot to artificial intelligence (AI) has been critical. For example, the mining company announced an expanded partnership valued at $6.7 billion with CoreWeave, a startup backed by Nvidia and a key supplier of AI model technology for the chipmaker. Core Scientific will provide an additional 112 megawatts of computing power to CoreWeave, boosting its 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.”

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