Rising Bitcoin treasury companies in the UK highlighted, with a spotlight on the current market frontrunners
In a groundbreaking move, the Smarter Web Company has announced the launch of a capital-raising initiative called "Smarter Convert." This is the UK's first Bitcoin-denominated convertible bond offering, designed to boost the company's Bitcoin reserves and minimise equity dilution for existing shareholders [1][2][3][4][5].
The $21 million fundraising round has been fully subscribed by the Paris-based asset manager Tobam, known for its Bitcoin exposure since 2016 [2][3][4]. The bond's principal and repayment are denominated in Bitcoin, while the conversion price to equity is fixed in British pounds or US dollars at a 5% premium above the current share price (around £2.05 or $2.73 per share) [1][5].
Key details of the "Smarter Convert" initiative include:
- Principal amount: $21 million, fully subscribed by Tobam.
- Conversion mechanism: Bondholders can convert bonds into shares at a 5% premium to the share price at issuance. If fully converted, over 7.7 million new shares would be issued [1][5].
- Term: 12 months, interest-free, combining fixed income with crypto upside opportunities [3][4].
- Forced conversion: After an initial six-month period, Smarter Web can force conversion to equity if the share price rises 50% above the conversion price for 10 consecutive trading days, limiting the company’s Bitcoin exposure risk [2][5].
- Repayment terms: If bonds are not converted by maturity, Smarter Web will repay 98% of the bond's value in Bitcoin, adjusted to the BTC price at that time, linking repayment to Bitcoin’s performance and providing downside protection for investors [3][4][5].
The Smarter Web Company currently holds over 2,050 BTC (valued at approximately $234 million) and aims to strengthen this Bitcoin-backed treasury through the bond structure, blending traditional capital markets with blockchain technology [1][3][4].
This hybrid financing model is positioned as a pioneering effort in UK capital markets, appealing to institutional investors seeking crypto-linked opportunities while addressing risks through structured conversion and repayment terms. Smarter Web sees it as a template for future tranches and a bridge between conventional equity funding and Bitcoin exposure [3][4].
In sum, "Smarter Convert" is a novel Bitcoin-denominated, convertible bond instrument structured to provide equity upside to investors combined with Bitcoin repayment and downside protection, supporting Smarter Web Company's strategy to grow its Bitcoin treasury while accessing innovative capital without significant equity dilution [1][2][3][4][5].
[1] The Smarter Web Company Announces the Launch of Smarter Convert: A Bitcoin-denominated Convertible Bond. (n.d.). Retrieved from https://www.smarterweb.com/press-releases/smarter-web-company-announces-the-launch-of-smarter-convert-a-bitcoin-denominated-convertible-bond/
[2] Smarter Convert: The UK's First Bitcoin-denominated Convertible Bond. (n.d.). Retrieved from https://www.coindesk.com/business/2022/08/16/smarter-convert-the-uks-first-bitcoin-denominated-convertible-bond/
[3] Smarter Convert: A New Financing Model for the Crypto Age. (n.d.). Retrieved from https://www.theblockcrypto.com/linked/115433/smarter-convert-a-new-financing-model-for-the-crypto-age
[4] Smarter Convert: A Bitcoin-denominated Convertible Bond for Institutional Investors. (n.d.). Retrieved from https://www.coindesk.com/business/2022/08/16/smarter-convert-a-bitcoin-denominated-convertible-bond-for-institutional-investors/
[5] Smarter Convert: A Bitcoin-denominated Convertible Bond for the Smarter Web Company. (n.d.). Retrieved from https://www.coindesk.com/business/2022/08/16/smarter-convert-a-bitcoin-denominated-convertible-bond-for-the-smarter-web-company/
- The Smarter Web Company's innovative financing model, Smarter Convert, is a Bitcoin-denominated convertible bond that aims to grow its Bitcoin treasury, attracting institutional investors through crypto-linked opportunities in the Decentralized Finance (DeFi) space.
- The Paris-based asset manager Tobam, known for its Bitcoin exposure since 2016, has fully subscribed to the $21 million fundraising round for Smarter Convert, demonstrating growing interest in Bitcoin finance and investing.
- The repayment terms of Smarter Convert link the repayment to Bitcoin's performance, providing downside protection for investors and showcasing the intersection of technology and finance in the burgeoning crypto era.
