Silvergate Bank Issues $205 Million Loan to MacroStrategy Collateralized by Bitcoin
Loan proceeds to be used by MacroStrategy, a subsidiary of MicroStrategy, to acquire additional bitcoins
Silvergate Bank, a subsidiary of Silvergate Capital Corporation, the leading provider of innovative financial infrastructure solutions and services for the growing digital currency industry, announced it has issued a $205 million term loan under its Silvergate Exchange Network (SEN) Leverage program to MacroStrategy LLC, a subsidiary of MicroStrategy Incorporated which is the largest independent publicly traded analytics and business intelligence company.
“We’re thrilled to add MicroStrategy to our growing list of SEN Leverage borrowers”
The interest-only term loan is secured by certain bitcoin held in MacroStrategy’s collateral account with a custodian mutually authorized by Silvergate and MacroStrategy. Under the terms of the agreement, MacroStrategy will use the loan proceeds (i) to purchase bitcoins, (ii) to pay fees, interest, and expenses related to the loan transaction, or (iii) for MacroStrategy’s or MicroStrategy’s general corporate purposes.
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“We’re thrilled to add MicroStrategy to our growing list of SEN Leverage borrowers,” said Alan Lane, Chief Executive Officer of Silvergate. “Their innovative approach to treasury management is an exceptional example of how institutions can utilize their bitcoin to support and grow their business.”
SEN Leverage, which launched in 2020, provides secure, institutional-grade access to capital through U.S. dollar loans collateralized by bitcoin. As of December 31, 2021, SEN Leverage had grown to approximately $570.5 million in commitments, demonstrating the increased need for access to capital in the digital currency industry.
“The SEN Leverage loan gives us an opportunity to further our position as the leading public company investor in bitcoin,” said Michael Saylor, Chairman and Chief Executive Officer of MicroStrategy. “Using the capital from the loan, we’ve effectively turned our bitcoin into productive collateral, which allows us to further execute against our business strategy.”
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