Block, Inc., previously known as Square, announced its intention to raise $1.5 billion by issuing senior notes to a select group of qualified institutional investors through a private placement.
Unlike public offerings, this private placement involves selling securities directly to a limited number of investors to raise capital.
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The financial technology company aims to use the funds for general corporate purposes, which could be debt repayment, potential acquisitions and strategic transactions, capital expenditures, investments, and working capital.
The company detailed that the offer would target institutional investors such as pension funds, banks, mutual funds, and high-net-worth individuals.
Block and the initial purchasers are still finalizing the specific terms of the senior notes, such as interest rates, redemption provisions, and maturity dates.
Fitch Ratings has pointed out that Block has relied on the convertible debt market to meet its capital needs since its initial public offering, adding:
The announced debt raise would bring additional debt onto its balance sheet, that is expected to ultimately help refinance 2025-2026 maturities, while also providing further cash support to its already strong balance sheet.
Following the announcement, Block's share price increased by over 4% to trade at $73.53 at the time of reporting.
Block was the first publicly listed company to offer a Bitcoin product, as stated by co-founder Jack Dorsey in a May 2 letter to shareholders. He also announced the company's plans to invest 10% of its monthly gross profits from Bitcoin products into buying more of the cryptocurrency.
The initiative reflects Block's proactive approach to managing its financial health and supporting its growth plans.
In other news, BlackRock has recently stated it expects a surge of institutional investors in Bitcoin ETFs.
