Tokyo Stock Exchange-listed Bitcoin treasury firm Metaplanet is buying more Bitcoin after securing a $130 million loan using its huge crypto holdings as collateral.
In a Tuesday notice to its shareholders, Metaplanet stated that the loan was executed on November 21 under previously approved terms, but the lender’s identity was undisclosed at the counterparty’s request. The borrowing is part of the firm’s $500 million credit facility, which allows it to raise short-term liquidity using the BTC held on Metaplanet’s balance sheet.
Metaplanet currently owns a 30,823 BTC stockpile, worth approximately $3.5 billion. The company stressed that its Bitcoin holdings are substantial enough to provide “significant collateral headroom” even during periods of jarring market volatility.
Per the notice, the $130 million loan carries a benchmark U.S. dollar rate plus a spread. The loan renews automatically daily, and the funds can be repaid at the company’s discretion.
With the fresh capital, Metaplanet’s utilization of the total $500 million credit line has increased to $230 million.
The company stated that it will utilize the loan proceeds to finance its Bitcoin acquisition spree, expand its BTC income-generation business, and share repurchases, depending on market conditions. According to Metaplanet, funds directed to its income generation business will serve as collateral to sell BTC options in order to capture premium revenue.
Metaplanet is the fourth-biggest publicly traded Bitcoin treasury company behind Michael Saylor’s Strategy, Bitcoin miner MARA, and Tether-backed Twenty One. The company temporarily halted new Bitcoin buys during the ongoing crypto market downturn but expressed that it remained firmly committed to its goal of acquiring 210,000 BTC, about 1% of the overall supply, by 2027.
Bitcoin was trading hands at around $86,978 as of press time, recovering some ground from a recent trip near $81K. The premier crypto’s price was 31% below its all-time high of $126,080 registered in October, according to crypto data provider CoinGecko.
Pundits have previously cautioned about the perils of publicly listed firms purchasing digital assets and how it could be inherently risky. Now, the share prices of many of these companies that have amassed cryptocurrencies have plummeted amid choppy market conditions.
Source: https://zycrypto.com/metaplanet-borrows-another-130-million-against-its-bitcoin-stash-to-load-up-on-more-btc/
