Microstrategy, a Nasdaq-listed company, has acquired a $205 million bitcoin-collateralized loan from Silvergate Bank, which will be used to purchase more bitcoin. “A specific bitcoin kept in Macrostrategy’s collateral account secures the interest-only term loan.”
Microstrategy revealed on Tuesday that one of its subsidiaries has secured a bitcoin-backed loan to buy more BTC.
The CEO of MicroStrategy, Michael Saylor, declared:
“Macrostrategy, a subsidiary of Microstrategy, has closed a $205 million bitcoin-collateralized loan with Silvergate Bank to purchase bitcoin.”
Silvergate Bank “has issued a $205 million term loan under its Silvergate Exchange Network (SEN) Leverage program to Macrostrategy LLC. The interest-only term loan is secured by certain bitcoin held in Macrostrategy’s collateral account with a custodian mutually authorized by Silvergate and Macrostrategy.”
Macrostrategy will utilize the loan proceeds to buy bitcoins, pay fees, interest, and expenditures linked to the loan transaction, or for its or its parent company’s general corporate purposes, according to the terms of the agreement.
SEN Leverage, which debuted in 2020, offers institutional-grade capital via U.S. dollar loans backed by bitcoin.
“The SEN Leverage loan gives us an opportunity to further our position as the leading public company investor in bitcoin. Using the capital from the loan, we’ve effectively turned our bitcoin into productive collateral, which allows us to further execute against our business strategy.”
Microstrategy already owns 125,051 Bitcoin in its treasury.
The CFO of the company declared:
“Our strategy with bitcoin has been to buy and hold, so to the extent, we have excess cash flows or we find other ways to raise money, we continue to put it into bitcoin.”