August 14, 2024
Core Scientific, Inc., a leading provider of digital infrastructure for bitcoin mining and high-performance computing, has announced the pricing of its $400 million offering of 3.00% convertible senior notes due 2029. This private offering, made to qualified institutional buyers under Rule 144A of the Securities Act of 1933, was increased from the initially planned $350 million. The issuance and sale of the notes are expected to close on August 19, 2024, pending customary closing conditions. Additionally, Core Scientific has given the initial purchasers an option to buy up to an additional $60 million in notes within 13 days of the initial issuance.
These senior, unsecured notes will accrue interest at 3.00% per annum, payable semi-annually starting March 1, 2025, and will mature on September 1, 2029, unless repurchased, redeemed, or converted earlier. Noteholders can convert their notes under certain conditions before June 1, 2029, and at any time after that until the maturity date. Core Scientific will settle conversions in cash, shares of its common stock, or a combination of both, at its discretion. The initial conversion rate is 90.9256 shares per $1,000 principal amount of notes, equating to an initial conversion price of approximately $11.00 per share, a 30.0% premium over the last reported sale price of $8.46 per share on August 13, 2024. The conversion rate and price are subject to adjustment based on certain events.
The notes can be redeemed, either partially or fully, for cash at Core Scientific’s discretion starting from September 7, 2027, until the 20th trading day before the maturity date. This is contingent on the last reported sale price of Core Scientific’s common stock exceeding 130% of the conversion price for a specified period and meeting certain conditions. The redemption price will include the principal amount of the notes plus any accrued and unpaid interest up to, but not including, the redemption date.
In the event of a “fundamental change” as defined in the notes’ indenture, noteholders can require Core Scientific to repurchase their notes for cash. The repurchase price will be the principal amount plus any accrued and unpaid interest up to, but not including, the repurchase date.
Core Scientific expects net proceeds from the offering to be around $386.6 million, or approximately $445.0 million if the initial purchasers fully exercise their option to buy additional notes. After deducting discounts, commissions, and estimated offering expenses, Core Scientific plans to use about $61.2 million to fully repay outstanding loans under its credit and guaranty agreement from January 23, 2024, and approximately $150.0 million to redeem all outstanding senior secured notes due 2028, excluding accrued but unpaid interest. The remaining proceeds will be used for general corporate purposes, including working capital, operating expenses, capital expenditures, acquisitions of complementary businesses, or other securities repurchases.
About Core Scientific
Core Scientific is a leading company in the field of bitcoin mining and digital infrastructure. Founded in 2017, the company has rapidly scaled its operations to become one of the largest bitcoin miners in North America. Core Scientific specializes in developing and managing high-performance computing infrastructure, which is essential for bitcoin mining and other digital innovations. They operate multiple data centers across the United States, including locations in Texas, Georgia, North Carolina, Kentucky, and North Dakota. Their mission is to accelerate digital innovation by providing scalable, efficient, and responsible infrastructure solutions. Core Scientific's expertise in data center design, technology development, and power management allows them to transform energy into high-value compute with superior efficiency.
Website: https://corescientific.com/
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