By Lisa Kerner
Charlotte, N.C., July 31 – Overstock.com, Inc. announced the sale of a $5 million five-year 7% unsecured cryptobond to FNY Managed Accounts LLC, an affiliate of FNY Capital.
While the cryptodebt has no covenants, it has both put and call provisions. The issuer expects it and FNY may unwind the bond in the fourth quarter of 2015 or sooner, according to a news release.
This strategic transaction positions FNY’s proprietary front end, HYDRATrade, and Overstock’s tØ.com cryptosecurities trading platform to offer the first fully integrated CryptoTrading software suite, the news release stated.
Simultaneous with the issue of this bond, Overstock is making a $5 million loan to FNY at 3% with similar put and call terms and with cross-default provisions against the bond. Overstock noted that it may issue identical cryptobonds to other qualified institutional investors but does not intend to make any similar loans to any future purchasers of any of its cryptodebt.
“In recent months the financial industry has been coming to understand the power of digital securities based on cryptotechnology and how this is going to change their world,” Overstock chief executive officer Patrick M. Byrne said in a news release.
In June, Byrne purchased a $500,000 TIGRcub digital bond the company issued through Entrex.net, the first such transaction in history.
Digital securities, unlike traditional securities, trade exclusively on a cryptographically protected, public and transparent ledger, using the same technology that powers the bitcoin digital currency.
Overstock.com is an online shopping retailer based in Salt Lake City, Utah.
| Issuer: | Overstock.com, Inc.
|
| Issue: | Cryptobond
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| Amount: | $5 million
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| Coupon: | 7%
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| Maturity: | Five years
|
| Distribution: | Private placement
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| Purchaser: | FNY Managed Accounts LLC
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