Keel Infrastructure to raise $350 million through convertible debt offering
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Key Takeaways
- Keel Infrastructure is seeking $350 million through a senior convertible note offering due 2032.
- Bitfarms Ltd. will provide a senior unsecured guarantee for the payment obligations.
- An additional $58 million in notes may be issued if underwriters exercise an over-allotment option.
- Proceeds are earmarked for data center development, equipment deposits, and capped call transactions.
- The capped call strategy targets a 100% premium to reduce potential equity dilution.
Keel Infrastructure (NASDAQ: KEEL) Corp. announced its intent to sell $350 million in senior unsecured convertible notes. The company also provided underwriters a 13-day window to buy an additional $58 million in notes. Completion of the sale depends on prevailing market conditions and standard closing requirements.
The notes carry a semi-annual interest schedule, with payments due every January and July beginning in 2027. At maturity in 2032, or upon earlier conversion, Keel retains the right to settle the notes using cash, common shares, or a mix of both. Specific pricing details, including the interest rate, will be finalized during negotiations with initial buyers.
Management plans to allocate the capital toward general corporate needs, specifically highlighting deposits for long-lead infrastructure and collateral for data center expansion projects. A portion of the net proceeds will also fund capped call transactions.
These capped call arrangements are intended to mitigate the dilutive impact of the conversion on existing shareholders. The company stated the cap is aimed at a 100% premium over the stock's closing price on the day the notes are priced.
