Leading U.S.-based cryptocurrency exchange Coinbase has seen enormous demand for its junk bond offering, with the firm increasing the size of the sale by one-third from $1.5 billion to $2 billion.
According to Economic Times, at least $7 billion worth of orders were placed in competition for equal quantities of seven and 10-year bonds, offering interest rates of 3.375% and 3.625% respectively.
The publication cites an anonymous source as claiming the interest rates were cheaper than the initial quotes offered by Coinbase, with the influx of demand suggesting buyers hold a higher opinion of the company’s credit-worthiness than initially suspected by the exchange.
“The strong demand is clearly a big endorsement by debt investors,” commented Bloomberg Intelligence analyst Julie Chariell.
However, the exchange’s bonds were rated one rank below investment-grade, with Bloomberg bond indexes indicating that similar debt offerings fetch a 2.86% yield on average.
Junk bonds refer to corporate debt issued by a company that does not have an investment-grade credit rating.