Digital Currency Group wraps up $600 million debt capital raise

Grayscale’s parent firm Digital Currency Group has completed yet another financing, this time involving $600 million 

On Thursday, Digital Currency Group (DCG) confirmed it had secured $ 600 million through a debt capital raise succeeding a recent $700 million secondary equity transaction. The conglomerate has some of the biggest names in the blockchain sector under its umbrella, most notably digital asset manager Grayscale. Its other wholly-owned subsidiaries include cryptocurrency news outlet CoinDesk and full-service digital currency prime broker Genesis.

Through a shared press release, the giant entity revealed that Elbridge was the agent tasked with administration obligations of the credit facility.

The development marks entry into the debt capital market

This is the first time the Manhattan-based private company has made a move in the debt capital markets. The crypto investment company intends to use the funds from the new credit facility to expand its portfolio. The company explained that its ‘strategic, operational, and financial capabilities’ had been bolstered thanks to the funding.

Speaking about the development, the firm’s chief executive Barry Silbert noted that the new capital would help better position the company to take on potential opportunities in the industry.

“We’ve solidified our premier market position in recent years through the development and growth of our diversified subsidiaries, continued expansion of our investment portfolio, and via acquisitions,” the firm’s Chief financial officer Michael Kraines added. “This debt financing is an important milestone to ensure DCG continues to play a leading role in the financing and development of this remarkably dynamic sector.”

At present, DCG has over $50 billion assets under management. The debt raise involved several parties, including lenders and funds managed by Francisco Partners, Capital Group, and Davidson Kempner Capital Management.

Silbert extolled the collaborations noting, “We’re very pleased to partner with this cohort of high-quality institutional lenders and, as a profitable and rapidly growing company, we are fortunate to be able to access this growth financing with an attractive cost of capital.”

$700 million secondary stock sale

The maiden million debt funding round comes a few days after the company attained the milestone of a $10 billion valuation after completing a $700 million secondary stock sale. The sale was led by SoftBank and featured other parties, including Ribbit Capital and Alphabet’s CapitalG. Before hitting the decacorn status, the giant crypto entity had only previously raised $25 million since its establishment.

DCG is one of a handful of privately held companies with a massive valuation. Remarking about the secondary stock sale, Silbert noted that the objective was not getting new capital but a chance for investors looking to take profits to do so. The raised funds were distributed among the shareholders that sold their shares, with none opting to release their shares wholly.

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