Smarter Web Issues $21M Bitcoin-Denominated Bond
Smarter Web Company Issues $21M Bitcoin-Denominated Bonds
The Smarter Web Company, a publicly traded UK-based firm with Bitcoin on its balance sheet, has secured $21 million through a Bitcoin-denominated bond offering. This marks a distinctive event in British capital markets.
In a London Stock Exchange announcement on Wednesday, The Smarter Web Company revealed the launch of "Smarter Convert," a Bitcoin-denominated bond that has already raised 15.8 million British pounds (approximately $21 million). The round was fully subscribed, with support from French asset management firm Tobam.
Key Details of the Bond
- Product Name: Smarter Convert
- Partnership: Designed with Tobam, who invested via three managed funds.
- Tobam's Commitment: CEO Yves Choueifaty emphasized their focus on "long-term alignment."
Tobam, reportedly managing over $2 billion in assets as of late 2024, has prior experience in crypto, having launched a Bitcoin mutual fund for institutional investors in 2017.
Andrew Webley, CEO of The Smarter Web Company, described the bond structure as a "first for the UK capital markets," anticipating it will unlock new capital and support the company's growth ambitions.
Convertible Bond Pricing
The bond has a 12-month term and is denominated in Bitcoin (BTC). It is convertible into The Smarter Web Company shares at a 5% premium over the Tuesday price of $2.60, setting the conversion price at approximately $2.73.
If all bonds convert, the company will issue just over 7.7 million new shares. The firm can enforce conversion if the share price exceeds the conversion price by 50% for ten consecutive trading days. If bondholders don't convert, the company will repay 98% of the bond principal in Bitcoin at maturity, adjusted to reflect the BTC price at that time.
Strategic Fundraising Approach
Pricing the bond in Bitcoin means repayment amounts will vary with Bitcoin's price. This strategy enables The Smarter Web Company to raise capital and increase its Bitcoin holdings without immediate share dilution.
According to the company, this bond structure results in approximately 5% less dilution compared to a traditional equity raise at the bond's issue date.
The Smarter Web Company holds 2,050 BTC, valued around $234 million, after its recent purchase of 225 BTC last month, according to data from BitcoinTreasuries.NET.