MicroStrategy, a publicly-traded business intelligence company, has announced that it has repaid its $205 million loan to Silvergate Bank at a significant discount.
According to a recently filed Form 8-K, MicroStrategy’s wholly-owned subsidiary, MacroStrategy, entered into a Credit and Security Agreement with Silvergate Bank on March 23, 2022.
The agreement saw Silvergate issue a $205 million term loan with a scheduled maturity date of March 23, 2025, and an interest rate of 8.27% as of March 24, 2023.
The loan was collateralized by certain Bitcoin owned by MacroStrategy and a $5 million cash reserve account held at Silvergate.
MicroStrategy repaid the loan on March 24, 2023, by prepaying approximately $161 million to Silvergate, effectively terminating the Credit Agreement and releasing Silvergate’s security interest in all of MacroStrategy’s assets, including the Bitcoin that was serving as collateral.
According to MicroStrategy CEO Michael Saylor, the loan was repaid at a 22% discount. This suggests that the company was able to negotiate a significant reduction in the loan balance, potentially due to the appreciation of the Bitcoin collateral held by MacroStrategy LLC.
The company’s CEO, Michael Saylor, revealed on Twitter that as of March 23, 2023, MicroStrategy and its subsidiaries had acquired an additional 6,455 BTC for approximately $150.0 million in cash between February 16, 2023, and March 23, 2023.
MicroStrategy repaid its $205M Silvergate loan at a 22% discount. As of 3/23/23, $MSTR acquired an additional ~6,455 bitcoins for ~$150M at an average of ~$23,238 per #bitcoin & held ~138,955 BTC acquired for ~$4.14B at an average of ~$29,817 per bitcoin. https://t.co/ALp9VLkTpt
— Michael Saylor⚡️ (@saylor) March 27, 2023
This brings the company’s total Bitcoin holdings to approximately 138,955 BTC, which were acquired at an aggregate purchase price of approximately $4.14 billion and an average purchase price of approximately $29,817 per Bitcoin.
