UK-based publicly listed company Smarter Web, holding Bitcoin assets, raised $21 million through new Bitcoin-denominated bonds, which is quite rare in the UK capital market.
On Wednesday, Smarter Web revealed in an announcement on the London Stock Exchange that it launched Bitcoin bonds, raising £15.8 million (approximately $21 million). The bonds are backed by French asset management giant Tobam and were fully subscribed.
This new product, 'Smarter Convert', was designed in collaboration with Tobam, which invests through three funds it manages. Tobam CEO Yves Choueifaty stated that the company is committed to this partnership in the long term.
Tobam announced the launch of the first Bitcoin mutual fund back in 2017. Smarter Web CEO Andrew Webley described this bond structure as a 'first in the UK capital markets.'
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Convertible bonds priced at a premium
The 12-month Bitcoin bond issued this time can be converted into company shares at a 5% premium compared to the $2.60 price on August 5, with a conversion price of approximately $2.73.
If all bonds are converted to shares, the company will issue more than 7.7 million new shares. However, if the stock price rises more than 50% above the conversion price for 10 consecutive days, the company can force the conversion.
If not converted, the company will repay 98% of the bond principal in Bitcoin at maturity, adjusted according to the Bitcoin price at that time.
A different way of fundraising
Since the bonds are priced in Bitcoin, the repayment amount will fluctuate with the Bitcoin price. This move allows the company to raise funds without immediately diluting equity, while also increasing its Bitcoin holdings.
"Raising funds at a premium based on the conversion price being higher than the reference price reduces equity dilution by 5%," the announcement stated.
According to data from BitcoinTreasuries.NET, after adding 225 BTC in July, the company holds 2050 BTC, valued at approximately $234 million.
