Mara Holdings announces proposed private offering of $850M of senior notes

MARA Holdings (MARA) intends to offer, subject to market conditions and other factors, $850M aggregate principal amount of 0.00% convertible senior notes due 2032 in a private offering to persons reasonably believed to be qualified institutional buyers in reliance on Rule 144A under the Securities Act of 1933, as amended. MARA also expects to grant to the initial purchasers of the notes an option to purchase, within a 13-day period beginning on, and including, the date on which the notes are first issued, up to an additional $150M aggregate principal amount of the notes. The offering is subject to market and other conditions, and there can be no assurance as to whether, when or on what terms the offering may be completed. The notes will be unsecured, senior obligations of MARA. The notes are not expected to bear regular interest and the principal amount of the notes is not expected to accrete. Special interest, if any, on the notes will be payable semi-annually in arrears on February 1 and August 1 of each year, beginning on February 1, 2026. The notes will mature on August 1, 2032, unless earlier repurchased, redeemed or converted in accordance with their terms. Subject to certain conditions, on or after January 15, 2030, MARA may redeem for cash all or any portion of the notes. If MARA redeems fewer than all the outstanding notes, at least $75M aggregate principal amount of notes must be outstanding and not subject to redemption as of the relevant redemption notice date. Holders of the notes will have the right to require MARA to repurchase for cash all or any portion of their notes on January 4, 2030, if the last reported sale price of MARA’s common stock on the second trading day immediately preceding the repurchase date is less than the conversion price. The notes will be convertible into cash, shares of MARA’s common stock, or a combination of cash and shares of MARA’s common stock, at MARA’s election. Prior to May 1, 2032, the notes will be convertible only upon the occurrence of certain events and during certain periods, and thereafter, at any time until the close of business on the second scheduled trading day immediately preceding the maturity date. The interest rate, initial conversion rate and other terms of the notes will be determined at the time of pricing of the offering. MARA expects that the reference price used to calculate the initial conversion price for the notes will be the U.S. composite volume weighted average price of MARA’s common stock from 2:00 p.m. through 4:00 p.m. Eastern Daylight Time on the date of pricing. MARA expects to use up to $50M of the net proceeds from the sale of the notes to repurchase a portion of its existing 1.00% convertible senior notes due 2026 in privately negotiated transactions with the remainder of the net proceeds to be used to pay the cost of the capped call transactions, to acquire additional bitcoin and for general corporate purposes, which may include working capital, strategic acquisitions, expansion of existing assets, and repayment of additional debt and other outstanding obligations. In connection with any repurchase of the 1.00% 2026 convertible notes, MARA expects that holders of the 1.00% 2026 convertible notes who agree to have their notes repurchased and who have hedged their equity price risk with respect to such notes will unwind all or part of their hedge positions by buying MARA’s common stock and/or entering into or unwinding various derivative transactions with respect to MARA’s common stock. The amount of MARA’s common stock to be purchased by the hedged holders or in connection with such derivative transactions may be substantial in relation to the historic average daily trading volume of MARA’s common stock. This activity by the hedged holders could increase (or reduce the size of any decrease in) the market price of MARA’s common stock, including concurrently with the pricing of the notes, resulting in a higher effective conversion price of the notes. MARA cannot predict the magnitude of such market activity or the overall effect it will have on the price of the notes or MARA’s common stock. In connection with the pricing of the notes, MARA expects to enter into privately negotiated capped call transactions with one or more of the initial purchasers and/or their respective affiliates and/or other financial institutions. If the initial purchasers exercise their option to purchase additional notes, MARA expects to use a portion of the net proceeds from the sale of such additional notes to enter into additional capped call transactions with the option counterparties. The capped call transactions will cover, subject to anti-dilution adjustments, the number of shares of common stock underlying the notes sold in the offering. The capped call transactions are generally expected to reduce potential dilution to the common stock upon any conversion of notes and/or offset any cash payments MARA elects to make in excess of the principal amount of converted notes, as the case may be, with such reduction and/or offset subject to a cap.