Coinbase launches 4% USDC high-yield saving accounts, also repurchases corporate bonds at a 29% discount.
In an effort to revive the declining market share of USDC, Coinbase has launched a high-interest offer of up to 4% on USDC to attract investors. Additionally, Coinbase announced a 29% discount to repurchase $64.5 million worth of convertible bonds, estimating to spend $45.5 million in cash. The CFO stated that this move is aimed at creating more value for shareholders.
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Earn 4% Interest on USDC Deposits
In an effort to boost the declining market share of USDC, Coinbase has introduced an attractive 4% interest rate on USDC to entice investors.
This program functions similarly to a one-month fixed deposit, with settlements made at the end of each month and rewards distributed at the beginning of the following month. Participants only need to have more than 1 USDC in their account to qualify. The official website emphasizes that interest rates are subject to adjustment.
Grow your savings with a rewarding, secure digital dollar. Global Coinbase customers can now earn 4% rewards on USDC.
Start earning → https://t.co/JJw8HqWcJJ
USDC is a trusted stablecoin that’s designed to be pegged and redeemable 1:1 for US Dollars. It’s backed by reserve… pic.twitter.com/IAGwDoCu4s
— Coinbase 🛡️ (@coinbase) June 15, 2023
Coinbase Announces Repurchase of Convertible Senior Notes
Coinbase announced yesterday that it will repurchase $64.5 million principal amount of 0.50% convertible senior notes due 2026 at a 29% discount, estimated to cost $45.5 million in cash.
According to Coinbase's previously disclosed financial reports, in May 2021, Coinbase privately issued $1.4 billion principal amount of 0.5% convertible senior notes to qualified institutional buyers, with a maturity date of June 1, 2026.
According to Coinbase's announcement, the repurchase is expected to be completed around June 20, 2023. Despite the repurchase, the convertible agreements originally signed with qualified buyers will remain valid. Since convertible senior notes themselves are a combination of bonds and options, although Coinbase has not disclosed details, it is likely that buyers have the right to purchase Coinbase's stock at a favorable price, as evidenced by their willingness to sell the initial senior notes at a 29% discount!
Coinbase CFO Alesia Haas stated:
We have been actively seeking the best opportunities to deploy capital to create shareholder value. As mentioned in our shareholder letter, the first quarter of 2023 marked a turning point in building a more efficient and robust financial foundation, and we will be looking for more opportunities like this in the future.