Galaxy Digital Secures $1.15 Billion in Exchangeable Senior Notes to Fuel Growth
On October 28, 2025, Galaxy Digital Inc. (GDI), recognized on the NASDAQ and TSX under the symbol GLXY, declared the pricing of its exchangeable senior notes offering. The offering, initially anticipated at $1 billion, has now been upsized to a substantial $1.15 billion of exchangeable senior notes, set to mature in 2031. This adjustment reflects increasing investor demand and trust in Galaxy’s growth trajectory.
The issuer, Galaxy Digital Holdings LP, has included an option for initial purchasers to buy an additional $150 million in notes during the 13-day period following the issuance date. This could further amplify their total offering to an impressive $1.3 billion if the option is exercised fully. The net proceeds from this offering are projected to be approximately $1.127 billion, which Galaxy intends to deploy to fuel its core business activities and support various corporate objectives, including potentially repaying existing notes maturing in 2026.
The newly issued notes come with an interest rate set at a modest 0.50% per year, payable every six months starting May 1, 2026. This structure allows investors to engage with the opportunity while also providing Galaxy with the necessary capital to enhance its operational capacity. It’s important to note that the exchange rate for these notes is established at 17.9352 shares of Galaxy’s Class A common stock per $1,000 note principal, representing a notable premium of approximately 37.5% over the share price on October 27, which was reported at $40.55.
A critical aspect of this offering is the provision that allows noteholders to exchange their notes for cash or company stock, enabling flexibility based on market conditions. Prior to February 1, 2031, exchanges are permitted only under specific circumstances, while thereafter, noteholders can execute exchanges until close to the maturity date. This flexibility can attract more investors, especially those interested in mingling debt instruments with equity potential.
Moreover, these exchangeable notes are unsecured obligations, meaning they do not have collateral backing them. However, Galaxy has structured them with favorable terms enabling potential redemption starting from November 6, 2028, should the stock perform well. This feature is particularly encouraging as it signals confidence in the company's future performance and ability to meet obligations without strain.
In light of possible corporate changes, the terms also state that if a 'fundamental change' occurs—potential scenarios include mergers or acquisitions—holders would have recourse to request cash buyouts at the principal amount plus any unpaid interest. This provision adds an element of security for investors, enhancing confidence in the investment's viability amid market fluctuations.
The issuance of these notes is not merely a financial strategy but also a reflection of Galaxy's market positioning within the burgeoning sectors of digital assets and AI infrastructure. With a strong operational base and a fast-growing data center initiative in Texas, Galaxy is poised to capitalize on increased demand for digital finance solutions and data processing capabilities. The company's Helios campus stands out with its capacity to support 800 MW, while additional expansions are under consideration, potentially pushing overall capacity to 2.7 GW, marking Galaxy as a significant player in North America's data sector.
Galaxy Digital's venture into the exchangeable notes market not only secures vital capital but also reinforces the company's strategy of leveraging financial instruments to fund growth amidst a rapidly evolving technology landscape. The execution of this offering and the forward-looking estimates surrounding it paint a picture of a bold organizational strategy aimed at ensuring long-term prosperity in the competitive world of digital finance and tech infrastructure. As the company seeks to finalize this transaction, the evolving corporate landscape will undoubtedly play a pivotal role in shaping its future endeavors, marking an essential step for investors and stakeholders alike.
The issuer, Galaxy Digital Holdings LP, has included an option for initial purchasers to buy an additional $150 million in notes during the 13-day period following the issuance date. This could further amplify their total offering to an impressive $1.3 billion if the option is exercised fully. The net proceeds from this offering are projected to be approximately $1.127 billion, which Galaxy intends to deploy to fuel its core business activities and support various corporate objectives, including potentially repaying existing notes maturing in 2026.
The newly issued notes come with an interest rate set at a modest 0.50% per year, payable every six months starting May 1, 2026. This structure allows investors to engage with the opportunity while also providing Galaxy with the necessary capital to enhance its operational capacity. It’s important to note that the exchange rate for these notes is established at 17.9352 shares of Galaxy’s Class A common stock per $1,000 note principal, representing a notable premium of approximately 37.5% over the share price on October 27, which was reported at $40.55.
A critical aspect of this offering is the provision that allows noteholders to exchange their notes for cash or company stock, enabling flexibility based on market conditions. Prior to February 1, 2031, exchanges are permitted only under specific circumstances, while thereafter, noteholders can execute exchanges until close to the maturity date. This flexibility can attract more investors, especially those interested in mingling debt instruments with equity potential.
Moreover, these exchangeable notes are unsecured obligations, meaning they do not have collateral backing them. However, Galaxy has structured them with favorable terms enabling potential redemption starting from November 6, 2028, should the stock perform well. This feature is particularly encouraging as it signals confidence in the company's future performance and ability to meet obligations without strain.
In light of possible corporate changes, the terms also state that if a 'fundamental change' occurs—potential scenarios include mergers or acquisitions—holders would have recourse to request cash buyouts at the principal amount plus any unpaid interest. This provision adds an element of security for investors, enhancing confidence in the investment's viability amid market fluctuations.
The issuance of these notes is not merely a financial strategy but also a reflection of Galaxy's market positioning within the burgeoning sectors of digital assets and AI infrastructure. With a strong operational base and a fast-growing data center initiative in Texas, Galaxy is poised to capitalize on increased demand for digital finance solutions and data processing capabilities. The company's Helios campus stands out with its capacity to support 800 MW, while additional expansions are under consideration, potentially pushing overall capacity to 2.7 GW, marking Galaxy as a significant player in North America's data sector.
Galaxy Digital's venture into the exchangeable notes market not only secures vital capital but also reinforces the company's strategy of leveraging financial instruments to fund growth amidst a rapidly evolving technology landscape. The execution of this offering and the forward-looking estimates surrounding it paint a picture of a bold organizational strategy aimed at ensuring long-term prosperity in the competitive world of digital finance and tech infrastructure. As the company seeks to finalize this transaction, the evolving corporate landscape will undoubtedly play a pivotal role in shaping its future endeavors, marking an essential step for investors and stakeholders alike.
Topics Financial Services & Investing）
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