Metaplanet Expands Bitcoin Strategy with New $130 Million Debt Deal

Tokyo-listed Bitcoin treasury firm Metaplanet has secured an additional $130 million in Bitcoin-backed credit. This move allows them to use collateralized loans to optimize BTC acquisitions and boost income generation strategies.

On Tuesday, Metaplanet disclosed that they executed the loan on Friday under a previously established credit facility. This borrowing adds to the company’s $500 million credit line, providing the flexibility to raise short-term liquidity with their Bitcoin as collateral.

With this new funding, Metaplanet’s cumulative loans from the facility have reached $230 million, which is an increase from the $100 million mentioned in their earlier announcement.

The firm recognizes potential collateral calls if the Bitcoin price drops but maintains confidence in their reserves capable of handling market volatility. Metaplanet stated, “Given the substantial scale of Bitcoin holdings relative to the loan amount, the Company expects to maintain sufficient collateral headroom.”

Metaplanet disclosure of $130 million loan. Source: Metaplanet

Metaplanet’s Dual Financing Approach

The latest loan underlines Metaplanet’s two-pronged financing strategy around debt and equity to continuously fund their Bitcoin acquisition. The $500 million Bitcoin-backed credit facility allows for flexible liquidity with their Bitcoin reserves, enabling expansion of their income program, increasing Bitcoin holdings, and facilitating share buybacks without issuing new shares.

In addition to the credit line, Metaplanet plans to raise $135 million by issuing new Class B perpetual preferred shares. Unlike the easily repayable structure of the credit facility, these preferred shares represent long-term financing with fixed yearly payouts and convertible options for investors.

This dual financing strategy ensures Metaplanet can continue to enhance its Bitcoin strategy, even amid market volatility.

Sustaining Holdings Amidst Price Decline

Data from BitcoinTreasuries.NET shows that Metaplanet is currently facing a nearly 20% unrealized loss from their Bitcoin investments, having acquired BTC at an average of $108,036, while the current market price hovers around $87,000.

Nonetheless, the company persists in holding onto its BTC and aims to purchase more. Bitcoin Strategy Director Dylan LeClair asserted on X that the company is “HODLing.”

Community member Ragnar connected the loan’s execution date to Bitcoin’s drop to $82,000 last Friday, suggesting, “It’s very likely that they bought the Bitcoin dip. I like the stock,” Ragnar remarked.