DeFi Dev Corp. Secures Funding With $112.5M Convertible Note Sale, Aims to Purchase SOL

DeFi Development Corp. priced a $112.5 million private offering of convertible senior notes due 2030, primarily to acquire solana ( SOL) tokens.

$112.5M Offering Prices for DeFi Dev Corp. Convertible Notes

The 5.5% notes, sold to qualified institutional buyers, carry an initial conversion price of $23.11 per share. According to the firm’s release, this represents a 10% premium over the company’s common stock closing price of $21.01 on July 1. The conversion rate is 43.2694 shares per $1,000 note principal. Initial purchasers hold a 7-day option to buy up to $25 million more notes, with closing expected July 8.

DeFi Development Corp. explained on Wednesday that the net proceeds are estimated at $108.1 million, potentially rising to $132.2 million if the option is fully exercised. Approximately $75.6 million will fund a prepaid forward stock purchase transaction related to the offering. The remaining funds are designated for general corporate purposes, including solana (SOL) acquisition.

The notes mature July 1, 2030, paying interest semi-annually starting January 2026. Conversion conditions apply before July 2030, after which they are freely convertible until maturity. The company can redeem notes starting July 2026 if its stock trades high enough. Holders gain repurchase rights upon certain fundamental changes.

Concurrently, the company entered a $75.6 million prepaid forward transaction with an initial purchaser. This facilitates hedging for note investors through derivative deals with the counterparty.

Hedging activities related to the prepaid forward and notes could impact the company’s stock price and conversion dynamics. The counterparty may adjust its hedge positions anytime before maturity, potentially affecting the value received by noteholders upon conversion.