Metaplanet Leans Into Bitcoin Debt Play With Fresh $130m To Buy...
The fresh debt draw shows how Metaplanet is using both debt and preferred equity to accelerate Bitcoin purchases and income-generation strategies.
Tokyo-listed Bitcoin treasury company Metaplanet has drawn another $130 million in Bitcoin-backed credit, expanding its use of collateralized borrowing to accelerate BTC purchases, income-generation strategies and potential share buybacks.
On Tuesday, Metaplanet disclosed it executed the loan on Friday under a previously announced credit facility. The borrowing forms part of the company’s $500 million credit line, which allows it to raise short-term liquidity using its Bitcoin (BTC) as collateral.
With the fresh capital, the company has now drawn $230 million in cumulative loans from the facility, up from the $100 million disclosed for an earlier Oct. 31 credit pull.
The company recognized that borrowing against its BTC exposes it to collateral calls if the BTC price declines. However, it expressed confidence in its reserve size, saying that it’s large enough to withstand volatility.
“Given the substantial scale of Bitcoin holdings relative to the loan amount, the Company expects to maintain sufficient collateral headroom,” Metaplanet wrote.
Metaplanet’s latest loan highlights its two-track funding strategy built around debt and equity instruments to fuel the continuous accumulation of Bitcoin.
On the one hand, the company’s $500 million Bitcoin-backed credit facility enables Metaplanet to have flexible, on-demand liquidity secured by its BTC reserves. This allows the company to expand its Bitcoin income program, buy more Bitcoin and support share buybacks without issuing new stock.
Alongside the credit line is another plan to raise $135 million through the issuance of new Class B perpetual preferred shares.
Unlike the short-term, easily repayable structure of the credit facility, the preferred shares represent long-term funding. Investors who buy the shares get a fixed yearly payout, can convert them into regular stock and in some cases, the company can buy them back if certain conditions are met.
Source: CoinTelegraph
